===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
----------------------
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
ON
FORM S-6
----------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST:
RANSON UNIT INVESTMENT TRUSTS, SERIES 65
B. NAME OF DEPOSITOR:
RANSON & ASSOCIATES, INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
250 North Rock Road, Suite 150
Wichita, Kansas 67206-2241
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
ALEX R. MEITZNER MARK J. KNEEDY
Ranson & Associates, Inc. Chapman and Cutler
250 North Rock Road, Suite 150 111 West Monroe Street
Wichita, Kansas 67206-2241 Chicago, Illinois 60603
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
Units of Beneficial Interest
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date
of the Registration Statement.
_
|X| Check box if it is proposed that this filing will become effective at
2:00 P.M. on February 18, 1998 pursuant to paragraph (b) of Rule 487.
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 65
------------------------
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
I. ORGANIZATION AND GENERAL INFORMATION
<S> <C>
1. (a)Name of trust................... ) Prospectus front cover
(b)Title of securities issued...... ) Essential Information
2. Name and address of each depositor. ) Administration of the Trust
3. Name and address of trustee........ ) *
4. Name and address of principal
underwriters...................... ) The Sponsor
5. State of organization of trust..... ) The Trust Fund
6. Execution and termination of trust ) The Trust Fund;
agreement......................... ) Administration of the Trust
7. Changes of name.................... ) The Trust Fund
8. Fiscal year........................ ) *
9. Litigation......................... ) *
II. GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
10. (a)Registered or bearer securities. ) Unitholders
(b)Cumulative or distributive
securities........................ ) The Trust Fund
(c)Redemption...................... ) Redemption
(d)Conversion, transfer, etc....... ) Unitholders;
) Public Offering of Units
(e)Periodic payment plan........... ) *
(f)Voting rights................... ) Unitholders
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
(g)Notice of certificateholders.... ) Investment Supervision;
) Administration of the Trust;
) Unitholders
(h)Consents required............... ) Unitholders;
) Administration of the Trust
(i)Other provisions................ ) Federal Tax Status
11. Type of securities comprising ) The Trust Fund;
units............................. ) Portfolio
12. Certain information regarding peri-
odic payment certificates......... ) *
13. (a) Load, fees, expenses, etc...... ) Interest, Estimated Long-Term Return
) and Estimated Current Return;
) Expenses of the Trust
(b)Certain information regarding
periodic payment certifi-
cates....................... ) *
(c)Certain percentages........... ) Essential Information; Public Offering
) of Units
(d)Certain other fees, etc. pay-
able by holders............. ) Unitholders
(e)Certain profits receivable by
depositor, principal under-
writers, trustee or affili- ) Expenses of the Trust;
ated persons................ ) Public Offering of Units
(f)Ratio of annual charges to in-
come........................ ) *
14. Issuance of trust's securities... ) The Trust Fund;
) Unitholders
15. Receipt and handling of payments ) *
from purchasers.................
16. Acquisition and disposition of ) The Trust Fund;
underlying securities........... ) Portfolio;
) Investment Supervision
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
17. Withdrawal or redemption......... ) Redemption;
) Public Offering of Units
18. (a)Receipt, custody and disposi-
tion of income.............. ) Unitholders
(b)Reinvestment of distributions. ) Distribution Reinvestment
(c)Reserves or special funds..... ) Expenses of the Trust
(d)Schedule of distributions..... ) *
19. Records, accounts and reports.... ) Unitholders;
) Redemption;
) Administration of the Trust
20. Certain miscellaneous provisions
of trust agreement
(a)Amendment..................... ) Administration of the Trust
(b)Termination................... ) *
(c)and (d) Trustee, removal and ) Administration of the Trust
successor................... )
(e)and (f) Depositor, removal and ) Administration of the Trust
successor................... )
21. Loans to security holders........ ) *
22. Limitations on liability......... ) Administration of the Trust
23. Bonding arrangements............. ) *
24. Other material provisions of
trust agreement................. ) *
III. ORGANIZATION, PERSONNEL AND
AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor........ ) Administration of the Trust
26. Fees received by depositor....... ) See Items 13(a) and 13(e)
27. Business of depositor............ ) Administration of the Trust
28. Certain information as to offi-
cials and affiliated persons of ) Administration of the Trust
depositor....................... )
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
29. Voting securities of depositor ) Administration of the Trust
30. Persons controlling depositor ) *
31. Payment by depositor for
certain services rendered
to trust.................. ) *
32. Payment by depositor for
certain other services
rendered to trust......... ) *
33. Remuneration of employees
of depositor for certain
services rendered to
trust..................... ) *
34. Remuneration of other per-
sons for certain services
rendered to trust......... ) *
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's se- ) Public Offering of Units
curities by states........
36. Suspension of sales of
trust's securities........ ) *
37. Revocation of authority to
distribute................ ) *
38. (a)Method of distribution.. ) Public Offering of Units;
(b)Underwriting agreements. )
(c)Selling agreements...... ) Public Offering of Units
39. (a)Organization of princi- ) Administration of the Trust
pal underwriters.......... )
(b)N.A.S.D. membership of
principal underwriters.... ) *
40. Certain fees received by
principal underwriters.... ) See Items 13(a) and 13(e)
41. (a)Business of principal ) Administration of the Trust
underwriters.............. )
(b)Branch offices of prin-
cipal underwriters........ ) *
(c)Salesmen of principal
underwriters.............. ) *
42. Ownership of trust's secu-
rities by certain persons. ) *
43. Certain brokerage commis-
sions received by princi-
pal underwriters.......... ) Public Offering of Units
44. (a)Method of valuation..... ) Public Offering of Units
(b)Schedule as to offering
price..................... ) *
(c)Variation in offering ) Public Offering of Units
price to certain persons..
45. Suspension of redemption
rights.................... ) Redemption
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
46. (a)Redemption valuation.... ) Redemption;
) Public Offering of Units
(b)Schedule as to redemp-
tion price................ ) *
47. Maintenance of position in ) Public Offering of Units;
underlying securities..... ) Redemption
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Organization and regulation ) Administration of the Trust
of trustee................ )
49. Fees and expenses of trustee ) Expenses of the Trust
50. Trustee's lien............. ) *
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
51. Insurance of holders of trust's ) Cover Page;
securities.................. ) Expenses of the Trust
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust agreement
with respect to selection or ) The Trust Fund;
elimination of underlying se- ) Portfolio;
curities..................... ) Investment Supervision
(b) Transactions involving elimi-
nation of underlying securi-
ties......................... ) *
(c) Policy regarding substitution
or elimination of underlying ) Investment Supervision
securities................... )
(d) Fundamental policy not other-
wise covered................. ) *
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
53. Tax status of Trust.............. ) Essential Information;
) Portfolio;
) Federal Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last
ten years........................ ) *
55. ) *
56. Certain information regarding pe-
riodic payment certificates..... ) *
57. ) *
58. ) *
59. Financial statements (Instruction
1(c) to Form S-6)............... ) *
</TABLE>
- --------------------
* Inapplicable, omitted, answer negative or not required.
-7-
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 65
Defined High Yield Corporate Income Series 7 (the "Trust") was formed for the
purpose of providing a high level of current income through investment in a
fixed portfolio consisting primarily of high yield, high risk corporate debt
obligations issued after July 18, 1984. THE SECURITIES INCLUDED IN THE TRUST ARE
RATED BELOW INVESTMENT GRADE (COMMONLY KNOWN AS "JUNK BONDS") AND ARE SUBJECT TO
GREATER MARKET FLUCTUATIONS AND POTENTIAL RISK OF LOSS OF INCOME AND PRINCIPAL
THAN ARE INVESTMENTS IN LOWER-YIELDING, HIGHER RATED FIXED INCOME SECURITIES.
THE SECURITIES INCLUDED IN THE TRUST SHOULD BE VIEWED AS SPECULATIVE AND AN
INVESTOR SHOULD REVIEW HIS ABILITY TO ASSUME THE RISKS ASSOCIATED WITH
SPECULATIVE CORPORATE BONDS. THE PAYMENT OF INCOME IS DEPENDENT UPON THE
CONTINUING ABILITY OF THE ISSUERS AND/OR OBLIGORS TO MEET THEIR RESPECTIVE
OBLIGATIONS. SEE "RISK FACTORS." For foreign investors who are not United States
citizens or residents, interest income from the High Yield Series may not be
subject to federal withholding taxes if certain conditions are met. See "Federal
Tax Status."
Units of the Trust are not deposits or obligations of, or guaranteed by, any
bank, and Units are not federally insured or otherwise protected by the Federal
Deposit Insurance Corporation and involve investment risk including loss of
principal.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The investor is advised to read and retain this
Prospectus for future reference.
THE DATE OF THIS PROSPECTUS IS FEBRUARY 18, 1998.
<PAGE>
SUMMARY
PUBLIC OFFERING PRICE. The Public Offering Price per Unit during the initial
offering period is equal to a pro rata share of the offering prices of the
Securities plus or minus a pro rata share of cash, if any, in the Principal
Account held or owned by the Trust, plus accrued interest plus that sales charge
indicated under "Essential Information." The secondary market Public Offering
Price per Unit will be based upon a pro rata share of the bid prices of the
Securities plus or minus a pro rata share of cash, if any, in the Principal
Account held or owned by the Trust, plus accrued interest plus the applicable
sales charge indicated under "Public Offering of Units-Public Offering Price."
The sales charge is reduced on a graduated scale for sales involving at least
$100,000 or 10,000 Units and will be applied on whichever basis is more
favorable to the investor. The minimum purchase is $1,000.
INTEREST AND PRINCIPAL DISTRIBUTIONS. Distributions of the estimated annual
interest income to be received by the Trust, after deduction of estimated
expenses, will be made monthly. See "Essential Information." Distributions of
funds, if any, in the Principal Account will be made as provided in
"Unitholders-Distributions to Unitholders."
REINVESTMENT. Each Unitholder may elect to have distributions of principal or
interest or both automatically invested without charge in shares of certain
mutual funds sponsored by Zurich Kemper Investments, Inc. See "Distribution
Reinvestment."
ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN. As of the opening of
business on the Initial Date of Deposit, the Estimated Long-Term Return and the
Estimated Current Return were as set forth in "Essential Information." The
Estimated Current Return is calculated by dividing the estimated net annual
interest income per Unit by the Public Offering Price. The estimated net annual
interest income per Unit will vary with changes in fees and expenses of the
Trustee, the Sponsor and Evaluator and with the principal prepayment,
redemption, maturity and exchange or sale of Securities while the Public
Offering Price will vary with changes in the offering price of the underlying
Securities and with changes in the accrued interest; therefore, there is no
assurance that the present Estimated Current Return will be realized in the
future. Estimated Long-Term Return is calculated using a formula which (1) takes
into consideration, and determines and factors in the relative weightings of,
the market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements or average lives of
all of the Securities and (2) takes into account the expenses and sales charge
associated with each Unit. Since the market values and estimated retirements or
average lives of the Securities and the expenses will change, there is no
assurance that the present Estimated Long-Term Return will be realized in the
future. Estimated Current Return and Estimated Long-Term Return are expected to
differ because the calculation of Estimated Long-Term Return reflects the
estimated date and amount of principal returned while Estimated Current Return
calculations include only net annual interest income and Public Offering Price.
MARKET FOR UNITS. After the initial offering period, while under no obligation
to do so, the Sponsor intends to maintain a market for the Units and to offer to
repurchase such Units at prices subject to change at any time which are based on
the aggregate bid side evaluation of the Securities plus accrued interest.
RISK FACTORS. An investment in the Trust should be made with an understanding of
the risks associated therewith, including, among other factors, the inability of
the issuer or an insurer, if any, to pay the principal of or interest on a
security when due, volatile interest rates, volatile market value of the
securities and early call provisions. See "Risk Factors."
2
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 65
ESSENTIAL INFORMATION
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT
SPONSOR AND EVALUATOR: RANSON & ASSOCIATES, INC.
TRUSTEE: THE BANK OF NEW YORK
The income, expense and distribution data set forth below has been calculated
for Unitholders purchasing less than 10,000 Units of a Trust. Unitholders
purchasing 10,000 Units or more of a Trust will receive a slightly higher return
because of the reduced sales charge for larger purchases.
<TABLE>
<CAPTION>
<S> <C>
Public Offering Price per Unit (1)(2) $ 9.975
Principal Amount of Securities per Unit $ 9.60
Estimated Current Return based on Public Offering Price (3)(4)(5)(6) 7.41%
Estimated Long-Term Return (3)(4)(5)(6) 7.00%
Estimated Normal Annual Distribution per Unit (6) $ .73961
Principal Amount of Securities $ 1,200,000
Number of Units 125,000
Fractional Undivided Interest per Unit 1/125,000
Calculation of Public Offering Price:
Aggregate Offering Price of Securities $ 1,190,790
Aggregate Offering Price of Securities per Unit $ 9.526
Plus Sales Charge per Unit (7) $ .449
Public Offering Price per Unit (1)(2) $ 9.975
Redemption Price per Unit $ 9.486
Sponsor's Initial Repurchase Price per Unit $ 9.526
Excess of Public Offering Price per Unit over Redemption Price per Unit $ .489
Excess of Public Offering Price per Unit over Sponsor's Initial
Repurchase Price per Unit $ .449
Calculation of Estimated Net Annual Interest Income per Unit (6):
Estimated Annual Interest $ .76121
Less: Estimated Annual Expense $ .02160
Estimated Net Annual Interest Income $ .73961
Estimated Daily Rate of Net Interest Accrual per Unit $ .002054472
Minimum Principal Value of the Trust under which Trust Agreement
may be terminated (8) $ 480,000
Trustee's Annual Fee per $1,000 principal amount of Securities (9) $ 1.45
Estimated annual interest income per Unit during the first year (6) $ .76121
Interest Payments (10):
First Payment per Unit, representing 8 days $ .01644
Estimated Normal Monthly Distribution per Unit $ .06163
Estimated Normal Annual Distribution per Unit $ .73961
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units are made as of
the close of business of the Sponsor (currently 3:15 p.m. Central Time) (the
"Evaluation Time") next following receipt of an order for a sale or purchase of
Units or receipt by the Trustee of Units tendered for redemption.
3
<PAGE>
ESSENTIAL INFORMATION-(CONTINUED)
<TABLE>
<S> <C>
Sales Charge (7):
As a percentage of Public Offering Price per Unit 4.50%
As a percentage of net amount invested 4.715%
As a percentage of net amount invested in earning assets 4.715%
</TABLE>
<TABLE>
<S> <C>
Date of Trust Agreement February 18, 1998
First Settlement Date February 23, 1998
Mandatory Termination Date February 15, 2008
Evaluator's Annual Evaluation Fee Maximum of $0.25 per $1,000 Principal Amount of Securities
Sponsor's Annual Surveillance Fee Maximum of $0.25 per $1,000 Principal Amount of Securities
</TABLE>
- --------------------
(1) Anyone ordering Units for settlement after the First Settlement Date
will pay accrued interest from such date to the date of settlement (normally
three business days after order) less distributions from the Interest
Account subsequent to the First Settlement Date. For purchases settling on
the First Settlement Date, no accrued interest will be added to the Public
Offering Price.
(2) Many unit investment trusts issue a number of units such that each unit
represents approximately $1,000 principal amount of underlying securities.
The Sponsor, on the other hand, in determining the number of Units has
elected not to follow this format but rather to provide that number of Units
which will establish as close as possible as of the Initial Date of Deposit
a Public Offering Price per Unit of $10.
(3) The Estimated Current Return and Estimated Long-Term Return are
increased for transactions entitled to a reduced sales charge. See "Public
Offering of Units-Public Offering Price."
(4) The Estimated Current Returns are calculated by dividing the estimated
net annual interest income per Unit by the Public Offering Price. The
estimated net annual interest income per Unit will vary with changes in fees
and expenses of the Trustee, the Sponsor and the Evaluator and with the
principal prepayment, redemption, maturity, exchange or sale of Securities
while the Public Offering Price will vary with changes in the offering price
of the underlying Securities and with changes in the accrued interest;
therefore, there is no assurance that the present Estimated Current Returns
indicated above will be realized in the future. The Estimated Long-Term
Returns are calculated using a formula which (1) takes into consideration,
and determines and factors in the relative weightings of, the market values,
yields (which takes into account the amortization of premiums and the
accretion of discounts) and estimated retirement dates of all of the
Securities and (2) takes into account the expenses and sales charge
associated with each Unit. Since the market values and estimated retirement
dates of the Securities and expenses of the Trust will change, there is no
assurance that the present Estimated Long-Term Returns as indicated above
will be realized in the future. The Estimated Current Returns and Estimated
Long-Term Returns are expected to differ because the calculation of the
Estimated Long-Term Returns reflects the estimated date and amount of
principal returned while the Estimated Current Return calculations include
only net annual interest income and Public Offering Price.
(5) This figure is based on estimated per Unit cash flows. Estimated cash
flows will vary with changes in fees and expenses, with changes in current
interest rates and with the principal prepayment, redemption, maturity,
call, exchange or sale of the underlying Securities. The estimated cash
flows to Unitholders are either set forth under "Estimated Cash Flows to
Unitholders" or are available upon request at no charge from the Sponsor.
(6) The estimated net annual interest income per Unit will remain as
indicated. See "Interest, Estimated Long-Term Return and Estimated Current
Return."
4
<PAGE>
(7) The sales charge as a percentage of the net amount invested in earning
assets will increase as accrued interest increases. Transactions subject to
quantity discounts (see "Public Offering of Units-Public Offering Price")
will have reduced sales charges, thereby reducing all percentages in the
table.
(8) The minimum principal value of the Trust under which the Trust Agreement
may be terminated is 40% of the total aggregate principal amount of
securities deposited during the primary offering period.
(9) See "Expenses of the Trust."
(10) Unitholders will receive interest distributions monthly. The Record Date
is the first day of the month, commencing March 1, 1998, and the
distribution date is the fifteenth day of the month, commencing
March 15, 1998.
THE TRUST FUND
Ranson Unit Investment Trusts, Series 65 includes one unit investment trust
created by the Sponsor under the name Ranson Unit Investment Trusts: "Defined
High Yield Corporate Income Series 7." The Trust was created under the laws of
the State of New York pursuant to a trust indenture dated the Initial Date of
Deposit (the "Trust Agreement") between Ranson & Associates, Inc. (the "Sponsor"
and "Evaluator") and The Bank of New York (the "Trustee").*
The Trust was formed for the purpose of providing a high level of current income
through investment in a fixed portfolio consisting primarily of high yield, high
risk corporate debt obligations issued after July 18, 1984. The Trust may be an
appropriate investment vehicle for investors who desire to participate in a
portfolio of taxable fixed income securities issued by corporate obligors with
greater diversification than investors might be able to acquire individually.
Diversification of the Trust assets will not eliminate the risk of loss always
inherent in the ownership of securities.
There is, of course, no guarantee that the Trust's objectives will be achieved.
As used herein, the terms "Securities" and "Bonds" mean the obligations
initially deposited in the Trust described under "Portfolio" (including all
contracts to purchase such obligations accompanied by an irrevocable letter of
credit sufficient to perform such contracts initially deposited in the Trust)
and any additional obligations deposited in the Trust following the Initial Date
of Deposit.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee that
aggregate principal amount of Securities or contracts for the purchase thereof
for deposit in the Trust as set forth under "Essential Information." Of such
principal amount, the amount specified in "Essential Information" was deposited
in the Trust. In exchange for the Securities so deposited, the Trustee delivered
to the Sponsor documentation evidencing the ownership of that number of Units as
indicated under "Essential Information." The Trust initially consists of
delivery statements (i.e., contracts) to purchase obligations. The Sponsor has a
limited right of substitution for such Securities in the event of a failed
contract. See "Trust Information."
Additional Units may be issued from time to time following the Initial Date of
Deposit by depositing in the Trust additional Securities (or contracts for the
purchase thereof together with cash or irrevocable letters of credit) or cash
(including a letter of credit) with instructions to purchase additional
- --------------------
* Reference is made to the Trust Agreement, and any statements contained
herein are qualified in their entirety by the provisions of the Trust
Agreement.
5
<PAGE>
Securities. As additional Units are issued by the Trust as a result of the
deposit of additional Securities by the Sponsor, the aggregate value of the
Securities in the Trust will be increased and the fractional undivided interest
in the Trust represented by each Unit will be decreased. The Sponsor may
continue to make additional deposits of Securities into the Trust following the
Initial Date of Deposit, provided that such additional deposits will be in
principal amounts which will maintain the same original percentage relationship
among the principal amounts of the Securities in the Trust established by the
initial deposit of the Securities. Thus, although additional Units will be
issued, each Unit will continue to represent the same principal amount of each
Security, and the percentage relationship among the principal amount of each
Security in the Trust will remain the same. If the Sponsor deposits cash to
purchase additional Securities exiting and new investors may experience a
dilution of their investments and a reduction in their anticipated income
because of fluctuations in the prices of the Securities between the time of the
cash deposit and the purchase of the Securities and because the Trust will pay
any associated brokerage fees. To minimize this effect, the Trust will attempt
to purchase the Securities as close to the evaluation time or as close to the
evaluation prices as possible.
Each Unit initially offered represents that undivided interest in the Trust
indicated under "Essential Information." To the extent that any Units are
redeemed by the Trustee or additional Units are issued as a result of additional
Securities being deposited by the Sponsor, the fractional undivided interest in
the Trust represented by each unredeemed Unit will increase or decrease
accordingly, although the actual interest in the Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor, or
until the termination of the Trust Agreement.
An investment in Units should be made with an understanding of the risks which
an investment in fixed rate debt obligations may entail, including the risk that
the value of the portfolio and hence of the Units will decline with increases in
interest rates. The value of the underlying Securities will fluctuate inversely
with changes in interest rates. The uncertain economic conditions of recent
years, together with the fiscal measures adopted to attempt to deal with them,
have resulted in wide fluctuations in interest rates and, thus, in the value of
fixed rate debt obligations generally and long-term obligations in particular.
The Sponsor cannot predict the degree to which such fluctuations will continue
in the future.
PORTFOLIO SELECTION
The selection of Bonds for the Trust was based largely upon the experience and
judgment of the Sponsor. In making such selections the Sponsor considered the
following factors: (a) the price of the Bonds relative to other issues of
similar quality and maturity; (b) the present rating and credit quality of the
issuers of the Bonds and the potential improvement in the credit quality of such
issuers; (c) the diversification of the Bonds as to location of issuer; (d) the
income to the Unitholders of the Trust; (e) whether the Bonds were issued after
July 18, 1984; and (f) the stated maturity of the Bonds.
As of the Initial Date of Deposit, all of the Bonds in the Trust are rated "Ba"
or better by Moody's or "BB" or better by Standard & Poor's. See "Description of
Ratings" and "Portfolio." Subsequent to the Initial Date of Deposit, a Bond may
cease to be so rated. If this should occur, the Trust would not be required to
eliminate the Bond from the Trust, but such event may be considered in the
Sponsor's determination to direct the Trustee to dispose of such investment. See
"Investment Supervision." The Trust consists of that number of Bonds divided by
type (and percentage of principal amount of the Trust) as set forth in the
following table.
6
<PAGE>
SERIES INFORMATION
<TABLE>
<S> <C>
Number of Bonds 17
Debt Obligations (1):
U.S. Corporate 17 (100%)
Average life of the Bonds in the Trust (2) 7.8 Years
Percentage of "when, as and if issued" or "delayed delivery"
Bonds purchased by the Trust None
Syndication (3) None
- --------------------
<FN>
(1) The portfolio percentage in parenthesis represents the principal amount
of such Bonds to the total principal amount of Bonds in the Trust. For a
discussion of the risks associated with investments in the bonds of such
issuers, see "Risk Factors."
(2) The average life of the Bonds in the Trust is calculated based upon the
stated maturities of the Bonds in the Trust (or, with respect to Bonds for
which funds or securities have been placed in escrow to redeem such Bonds on
a stated call date, based upon such call date). The average life of the
Bonds in the Trust may increase or decrease from time to time as Bonds
mature or are called or sold.
(3) The Sponsor and its affiliates have participated as either the sole
underwriter or manager or a member of underwriting syndicates from which
approximately that percentage listed above of the aggregate principal amount
of the Bonds in the Trust were acquired.
</FN>
</TABLE>
7
<PAGE>
PORTFOLIO
As of the Initial Date of Deposit: February 18, 1998
<TABLE>
<CAPTION>
Rating(2)
-----------------
Standard Cost of
Aggregate & Redemption Bonds
Principal Name of Issuer(1)(5) Coupon Maturity Moody's Poor's Provisions(3) to Trust(4)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 75,000 AK Steel Corp 9.125% 12/15/06 Ba2 BB- 2001 @ 104.560 $ 80,109
100,000 Advanced Micro Device 11.000% 8/1/03 Ba1 BB- 2001 @ 105.500 108,453
50,000 CBS Inc. 7.625% 1/1/02 Ba1 BB Non-callable 51,443
75,000 Century Communication(6) 0.000% 1/15/08 Ba3 BB- Non-callable 32,780
75,000 Columbia / HCA 6.910% 6/15/05 Ba2 BBB Non-callable 70,722
50,000 Comcast Corporation 9.125% 10/15/06 Ba3 BB+ 2000 @ 104.562 53,675
75,000 Kaufman & Broad Home Corp 9.375% 5/1/03 Ba3 B+ 2000 @ 100 78,734
50,000 Lenfest Communications 8.375% 11/1/05 Ba3 BB+ Non-callable 52,345
50,000 Niagara Mohawk Power Co. 8.000% 6/1/04 Ba3 BB+ Non-callable 53,777
100,000 RJR Nabisco Inc. 8.750% 8/15/05 Baa3 BBB- Non-callable 108,194
100,000 Rogers Communication Inc. 8.875% 7/15/07 B2 BB- 2002 @ 104.440 101,183
50,000 Southland Corporation 4.500% 6/15/04 B2 BB+ Anytime @ 100 41,229
50,000 TCI Communications Inc. 6.875% 2/15/06 Ba1 BBB- Non-callable 50,935
75,000 Tenet Healthcare 8.625% 1/15/07 Ba3 B+ 2002 @ 104.310 79,303
75,000 Viacom Inc. 8.000% 7/7/06 B1 BB- 1999 @ 103 77,015
50,000 WMX Technologies 7.000% 10/15/06 Baa1 A- Non-callable 51,330
100,000 Wheeling-Pittsburgh Corp 9.250% 11/15/07 B2 BB- 2002 @ 104.625 99,563
- ---------- ----------
$1,200,000 $1,190,790
========== ==========
</TABLE>
See independent auditors report on page 11 of this prospectus.
8
<PAGE>
NOTES TO PORTFOLIO:
(1) Contracts to acquire Bonds were entered into by the Sponsor on February
12, 1998. All Bonds are represented by regular way contracts, unless
otherwise indicated, for the performance of which an irrevocable letter of
credit has been deposited with the Trustee.
(2) A brief description of the applicable Standard & Poor's and Moody's
rating symbols and their meanings is set forth under "Description of
Ratings." "N.R." indicates that the issue has not been rated by that rating
agency. As of the Initial Date of Deposit the Bonds were rated as follows by
Moody's (as a percentage of the Trust's total assets): Baa, 13%; Ba, 60%; B,
27%.
(3) There is shown under this heading the year in which each issue of Bonds
is initially or currently redeemable and the redemption price for that year;
unless otherwise indicated, each issue continues to be redeemable at
declining prices thereafter, but not below par value. The prices at which
the Bonds may be redeemed or called prior to maturity may or may not
include a premium and, in certain cases, may be less than the cost of the
Bonds to the Trust. In addition, certain Bonds in the portfolio may be
redeemed in whole or in part other than by operation of the stated
redemption provisions under certain unusual or extraordinary circumstances
specified in the instruments setting forth the terms and provisions of
such Bonds. "S.F." indicates that a sinking fund is established with
respect to that issue of Bonds.
(4) During the initial offering period, evaluations of Bonds are made on the
basis of current offering side evaluations of the Bonds. The aggregate
offering price is greater than the aggregate bid price of the Bonds, which
is the basis on which the Redemption Price will be determined for purposes
of redemption of Units after the initial offering period.
(5) Other information regarding the Bonds in the Trust, at the opening of
business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
Annual
Cost of Profit or Interest Bid Side
Bonds to (Loss) to Income Value of
Sponsor Sponsor to Trust Bonds
---------- --------- -------- ----------
<C> <C> <C> <C>
$1,190,129 $661 $95,151 $1,185,688
</TABLE>
The Cost of Bonds to Sponsor and Profit or (Loss) to Sponsor reflect
portfolio hedging transaction costs, hedging gains or losses, and certain
other carrying costs.
(6) This Bond was issued at an original issue discount. The tax effect of
Bonds issued at an original issue discount is described in "Federal Tax
Status." This Bond has been purchased at a deep discount from the par value
because there is little or no stated interest income thereon. Bonds which
pay no interest are normally described as "zero coupon" bonds. Over the
life of bonds purchased at a deep discount the value of such bonds will
increase such that upon maturity the holders of such bonds will receive
100% of the principal amount thereof. Approximately 6% of the aggregate
principal amount of the Bonds in the Trust were issued at an original
issue discount.
9
<PAGE>
ESTIMATED CASH FLOWS TO UNITHOLDERS
The table below sets forth the estimated distributions of interest and principal
to Unitholders on a per Unit basis. The table assumes no changes in expenses, no
changes in the current interest rates, no exchanges, redemptions, sales or
prepayments of the underlying Bonds prior to maturity or expected retirement
date and the receipt of principal upon maturity or expected retirement date. To
the extent the foregoing assumptions change actual distributions will vary.
<TABLE>
<CAPTION>
Estimated Estimated Estimated
Interest Principal Total
Dates Distribution Distribution Distribution
--------------------------------- ------------ ------------ ------------
<C> <S> <S> <S>
Monthly
March 15, 1998 $.01644 $.01644
April 15, 1998 to May 15, 2000 $.06163 $.06163
June 15, 2000 $.05706 $.60000 $.65706
July 15, 2000 to October 15, 2000 $.05706 $.05706
November 15, 2000 $.05409 $.40000 $.45409
December 15, 2000 to December 15, 2001 $.05409 $.05409
January 15, 2002 $.04964 $.60000 $.64964
February 15, 2002 $.04718 $.40000 $.44718
March 15, 2002 to August 15, 2003 $.04718 $.04718
September 15, 2003 $.03999 $.80000 $.83999
October 15, 2003 to June 15, 2004 $.03999 $.03999
July 15, 2004 $.03598 $.80000 $.83598
August 15, 2004 to June 15, 2005 $.03598 $.03598
July 15, 2005 $.03263 $.60000 $.63263
August 15, 2005 $.03263 $.03263
September 15, 2005 $.02695 $.80000 $.82695
October 15, 2005 to November 15, 2005 $.02695 $.02695
December 15, 2005 $.02423 $.40000 $.42423
January 15, 2006 to February 15, 2006 $.02423 $.02423
March 15, 2006 $.02202 $.40000 $.42202
April 15, 2006 to July 15, 2006 $.02202 $.02202
August 15, 2006 $.01813 $.60000 $.61813
September 15, 2006 to October 15, 2006 $.01813 $.01813
November 15, 2006 $.01587 $.40000 $.41587
December 15, 2006 to January 15, 2007 $.01587 $.01587
February 15, 2007 $.01167 $.60000 $.61167
March 15, 2007 to July 15, 2007 $.01167 $.01167
August 15, 2007 $.00590 $.80000 $.80590
September 15, 2007 to November 15, 2007 $.00590 $.00590
December 15, 2007 - $.80000 $.80000
February 15, 2008 - $.60000 $.60000
</TABLE>
10
<PAGE>
REPORT OF ALLEN, GIBBS & HOULIK, L.C.
INDEPENDENT AUDITORS
UNITHOLDERS
RANSON UNIT INVESTMENT TRUSTS, SERIES 65
We have audited the accompanying statement of net assets (page 12 of this
prospectus), including the Trust portfolio (page 8 and 9 of this prospectus),
of Ranson Unit Investment Trusts, Series 65, as of the opening of business on
February 18, 1998, the Initial Date of Deposit. The statement of net assets
is the responsibility of the Sponsor. Our responsibility is to express an
opinion on the statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of net assets are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of net assets. Our procedures
included confirmation of the purchases of Securities to be deposited in the
Trust by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall statement of net assets presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents fairly,
in all material respects, the financial position of Ranson Unit Investment
Trusts, Series 65 as of February 18, 1998, in conformity with generally
accepted accounting principles.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
February 18, 1998
11
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 65
STATEMENT OF NET ASSETS
AT THE OPENING OF BUSINESS ON FEBRUARY 18, 1998, THE INITIAL DATE OF DEPOSIT
<TABLE>
<S> <C>
TRUST PROPERTY
Investment in securities--
Securities deposited in Trust (1) $ 1,190,790
Accrued interest to Initial Date of Deposit on Securities (2) 14,625
--------------
1,205,415
Less distributions payable (2) 14,625
--------------
Net assets, applicable to outstanding Units of fractional
undivided interest $ 1,190,790
==============
INTEREST OF UNITHOLDERS
Cost to investors (3) $ 1,246,900
Less sales charge (3) 56,110
--------------
Net proceeds to the Trust, equal to net assets $ 1,190,790
==============
- --------------------
<FN>
NOTES:
(1) Aggregate cost to the Trust of the Securities listed in the Trust
Portfolio is based on offering side evaluations determined by Muller Data
Corporation.
(2) Pursuant to the Trust Agreement, the Trustee will advance funds in the
amount of $15,947 representing the accrued interest to February 23, 1998
(the "First Settlement Date") and such advance will be distributed to
the Sponsor.
(3) The aggregate cost to investors (exclusive of interest) includes a sales
charge as set forth under "Essential Information" assuming no reduction of
sales charge for quantity purchases.
</FN>
</TABLE>
See independent auditors report on page 11 of this prospectus.
12
<PAGE>
RISK FACTORS
General. An investment in Units of the Trust should be made with an
understanding of the risks that an investment in "high yield", high risk, fixed
rate, corporate debt obligations or "junk bonds" may entail, including increased
credit risks and the risk that the value of the Units will decline, and may
decline precipitously, with increases in interest rates. In recent years there
have been wide fluctuations in interest rates and thus in the value of fixed-
rate, debt obligations generally, Securities such as those included in the Trust
are, under most circumstances, subject to greater market fluctuations and risk
of loss of income and principal than are investments in lower-yielding, higher
rated securities, and their value may decline precipitously because of increases
in interest rates not only because the increases in rates generally decrease
values but also because increased rates may indicate a slowdown in the economy
and a decrease in the value of assets generally that may adversely affect the
credit of issuers of high yield, high risk securities resulting in a higher
incidence of defaults among high yield, high risk securities. A slowdown in the
economy, or a development adversely affecting an issuer's creditworthiness, may
result in the issuer being unable to maintain earnings or sell assets at the
rate and at the prices, respectively, that are required to produce sufficient
cash flow to meet its interest and principal requirements. For an issuer that
has outstanding both senior commercial bank debt and subordinated high yield,
high risk securities, an increase in interest rates will increase that issuer's
interest expense insofar as the interest rate on the bank debt is fluctuating.
However, many leveraged issuers enter into interest rate protection agreements
to fix or cap the interest on a large portion of their bank debt. This reduces
exposure to increasing interest rates but reduces the benefit to the issuer of
declining rates. The Sponsor cannot predict future economic policies or their
consequences or, therefore, the course or extent of any similar market
fluctuations in the future. The portfolio consists of Bonds that, in many cases,
do not have the benefit of covenants that would prevent the issuer from engaging
in capital restructurings or borrowing transactions in connection with corporate
acquisitions, leveraged buy outs or restructurings that could have the effect of
reducing the ability of the issuer to meet its obligations and might result in
the ratings of the Bonds and the value of the underlying portfolio being
reduced.
The Bonds in the Trust consist of "high yield, high risk" corporate bonds. "High
yield" or "junk" bonds, the generic names for corporate bonds rated below BBB by
Standard & Poor's or below Baa by Moody's Investor Service, Inc., are frequently
issued by corporations in the growth stage of their development, by established
companies whose operations or industries are depressed or by highly leveraged
companies purchased in leveraged buyout transactions. The market for high yield
bonds is very specialized and investors in it have been predominantly financial
institutions. High yield bonds are generally not listed on a national securities
exchange. Trading of high yield bonds, therefore, takes place primarily in over-
the-counter markets which consist of groups of dealer firms that are typically
major securities firms. Because the high yield bond market is a dealer market,
rather than an auction market, no single obtainable price for a given bond
prevails at any given time. Prices are determined by negotiation between
traders. The existence of a liquid trading market for the Bonds may depend on
whether dealers will make a market in the Bonds. There can be no assurance that
a market will be made for any of the Bonds, that any market for the Bonds will
be maintained or of the liquidity of the Bonds in any markets made. Not all
dealers maintain markets in all high yield bonds. Therefore, since there are
fewer traders in these bonds than there are in "investment grade" bonds, the
bid-offer spread is usually greater for high yield bonds than it is for
investment grade bonds. The price at which the Securities may be sold to
meet redemptions and the value of the Trust will be adversely affected if
trading markets for the Bonds are limited or absent. If the rate of
redemptions is great, the value of the Trust may decline to a level that
requires liquidation (see "Administration of the Trust-Amendment and
Termination").
13
<PAGE>
Lower-rated securities tend to offer higher yields than higher-rated securities
with the same maturities because the creditworthiness of the issuers of lower-
rated securities may not be as strong as that of other issuers. Moreover, if a
Bond is recharacterized as equity by the Internal Revenue Service for Federal
income tax purposes, the issuer's interest deduction with respect to the Bond
will be disallowed and this disallowance may adversely affect the issuer's
credit rating. Because investors generally perceive that there are greater risks
associated with the lower-rated securities in the Trust, the yields and prices
of these securities tend to fluctuate more than higher rated securities with
changes in the perceived quality of the credit of their issuers. In addition,
the market value of high yield, high risk, fixed-income securities may fluctuate
more than the market value of higher-rated securities since high yield, high
risk, fixed-income securities tend to reflect short-term credit development to a
greater extent than higher-rated securities. Lower-rated securities generally
involve greater risks of loss of income and principal than higher-rated
securities. Issuers of lower-rated securities may possess less creditworthiness
characteristics than issuers of higher-rated securities and, especially in the
case of issuers whose obligations or credit standing have recently been
downgraded, may be subject to claims by debtholders, owners of property leased
to the issuer or others which, if sustained, would make it more difficult for
the issuers to meet their payment obligations. High yield, high risk bonds are
also affected by variables such as interest rates, inflation rates and real
growth in the economy. Therefore, investors should consider carefully the
relative risks associated with investment in securities which carry lower
ratings.
The value of the Units reflects the value of the portfolio securities, including
the value (if any) of securities in default. Should the issuer of any Bond
default in the payment of principal or interest, the Trust may incur additional
expenses seeking payment on the defaulted Bond. Because amounts (if any)
recovered by the Trust in payment under the defaulted Bond may not be reflected
in the value of the Units until actually received by the Trust, and depending
upon when a Unitholder purchases or sells his Units, it is possible that a
Unitholder would bear a portion of the cost of recovery without receiving any
portion of the payment recovered.
High yield, high risk bonds are generally subordinated bonds. The payment of
principal (and premium, if any), interest and sinking fund requirements with
respect to subordinated bonds of an issuer is subordinated in right of payment
to the payment of senior bonds of the issuer. Senior bonds generally include
most, if not all, significant debt bonds of an issuer, whether existing at the
time of issuance of subordinated debt or created thereafter. Upon any
distribution of the assets of an issuer with subordinated bonds upon
dissolution, total or partial liquidation or reorganization of or similar
proceeding relating to the issuer, the holders of senior indebtedness will be
entitled to receive payment in full before holders of subordinated indebtedness
will be entitled to receive any payment. Moreover, generally no payment with
respect to subordinated indebtedness may be made while there exists a default
with respect to any senior indebtedness. Thus, in the event of insolvency,
holders of senior indebtedness of an issuer generally will recover more,
ratably, than holders of subordinated indebtedness of that issuer.
Bonds that are rated lower than BBB by Standard & Poor's or Baa by Moody's,
respectively, should be considered speculative as such ratings indicate a
quality of less than investment grade. Investors should carefully review the
objective of the Trust and consider their ability to assume the risks involved
before making an investment in the Trust. See "Description of Ratings" for a
description of speculative ratings issued by Standard & Poor's and Moody's.
The Trust Agreement authorizes the Sponsor to increase the size of the Trust and
the number of Units thereof by the deposit of additional Securities, or cash
(including a letter of credit) with instructions to purchase additional
14
<PAGE>
Securities, in the Trust and the issuance of a corresponding number of
additional Units. If the Sponsor deposits cash, existing and new investors may
experience a dilution of their investments and a reduction in their anticipated
income because of fluctuations in the prices of the Securities between the time
of the cash deposit and the purchase of the Securities and because the Trust
will pay the associated brokerage fees. To minimize this effect, the Trust will
attempt to purchase the Securities as close to the evaluation time or as close
to the evaluation prices as possible.
Like other investment companies, financial and business organizations and
individuals around the world, the Trust could be adversely affected if the
computer systems used by the Sponsor, Evaluator or Trustee or other service
providers to the Trust do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Problem." While the Sponsor, Evaluator and Trustee are taking
steps that they believe are reasonably designed to address the Year 2000
Problem, there can be no assurance that these steps will be sufficient to avoid
any adverse impact to the Trust. The Year 2000 Problem may impact certain
issuers of the Bonds to varying degrees, however, the Sponsor is unable to
predict what impact, if any, the Year 2000 Problem will have on any issuer.
FEDERAL TAX STATUS
For purposes of the following discussion and opinions, it is assumed that
interest on the Bonds is included in gross income for Federal income tax
purposes and that the Bonds are debt for Federal income tax purposes. In the
opinion of Chapman and Cutler, special counsel for the Sponsor, under existing
law:
1.The Trust is not an association taxable as a corporation for Federal income
tax purposes.
2.Each Unitholder will be considered the owner of a pro rata portion of each of
the Trust assets for Federal income tax purposes under Subpart E, Subchapter
J of Chapter 1 of the Internal Revenue Code of 1986 (the "Code"); and the
income of the Trust will be treated as income of the Unitholders. Each
Unitholder will be considered to have received his pro rata share of income
derived from each Trust asset when such income is considered to be received
by the Trust. Each Unitholder will also be required to include in taxable
income for Federal income tax purposes, original issue discount with respect
to his interest in any Bonds held by the Trust at the same time and in the
same manner as though the Unitholder were the direct owner of such interest.
3.Each Unitholder will have a taxable event when a Bond is disposed of (whether
by sale, exchange, liquidation, redemption, or payment at maturity or
otherwise) or when the Unitholder redeems or sells his Units. A Unitholder's
tax basis in his Units will equal his tax basis in his pro rata portion of
all the assets of the Trust. Such basis is determined (before the adjustments
described below) by apportioning the tax basis for the Units among each of
the Trust assets according to value as of the valuation date nearest the date
of acquisition of the Units. Unitholders must reduce the tax basis of their
Units for their share of accrued interest received, if any, on Bonds
delivered after the date the Unitholders pay for their Units to the extent
such interest accrued on such Bonds before the date the Trust acquired
ownership of the Bonds (and the amount of this reduction may exceed the
amount of accrued interest paid to the sellers) and, consequently, such
Unitholders may have an increase in taxable gain or reduction in capital loss
upon the disposition of such Units. Gain or loss upon the sale or redemption
of Units is measured by comparing the proceeds of such sale or redemption
with the adjusted basis of the Units. If the Trustee disposes of Bonds
15
<PAGE>
(whether by sale, exchange, payment on maturity, redemption or otherwise),
gain or loss is recognized to the Unitholder (subject to various
nonrecognition provisions of the Code). The amount of any such gain or loss
is measured by comparing the Unitholder's pro rata share of the total
proceeds from such disposition with his basis for his fractional interest in
the asset disposed of. The basis of each Unit and of each Bond which was
issued with original issue discount (or which has market discount) must be
increased by the amount of accrued original issue discount (and accrued
market discount if the Unitholder elects to include market discount in income
as it accrues) and the basis of each Unit and of each Bond which was
purchased by the Trust at a premium must be reduced by the annual
amortization of bond premium which the Unitholder has properly elected to
amortize under Section 171 of the Code. The tax basis reduction requirements
of the Code relating to amortization of bond premium may, under some
circumstances, result in the Unitholder realizing a taxable gain when his
Units are sold or redeemed for an amount equal to or less than his original
cost. Original issue discount is effectively treated as interest for Federal
income tax purposes and the amount of the original issue discount is
generally the difference between the Bond's purchase price and its stated
redemption price at maturity. A Unitholder will be required to include in
gross income for each taxable year the sum of the daily portions of any
original issue discount attributable to the Bonds held by the Trust as such
original issue discount accrues for such year and will, in general, be
subject to Federal income tax with respect to the total amount of such
original issue discount that accrues for such year even though the income is
not distributed to the Unitholders during such year, unless the original
issue discount on a Bond is less than a "de minimis" amount as determined
under the Treasury Regulations. To the extent the amount of such discount is
less than the respective "de minimis" amount, such discount shall be treated
as zero. In general, original issue discount accrues daily under a constant
interest rate method which takes into account the semi-annual compounding of
accrued interest. Unitholders should consult their tax advisers regarding the
Federal income tax consequences and accretion of original issue discount.
Limitations on Deductibility of Trust Expenses by Unitholders. Each Unitholder's
pro rata share of each expense paid by the Trust is deductible by the Unitholder
to the same extent as though the expense had been paid directly by him. It
should be noted that as a result of the Tax Reform Act of 1986 (the "Act"),
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income (similar limitations also apply to estates and trusts). Unitholders may
be required to treat some or all of the expenses paid by the Trust as
miscellaneous itemized deductions subject to this limitation.
Premium. If a Unitholder's tax basis of his pro rata portion in any Bonds held
by the Trust exceeds the amount payable by the issuer of the Bond with respect
to such pro rata interest upon the maturity of the Bond, such excess would be
considered premium which may be amortized by the Unitholder at the Unitholder's
election as provided in Section 171 of the Code. Unitholders should consult
their tax advisors regarding whether such election should be made and the manner
of amortizing premium.
Original Issue Discount. Certain of the Bonds in the Trust may have been
acquired with "original issue discount." In the case of any Bonds in the Trust
acquired with "original issue discount" that exceeds a "de minimis" amount as
specified in the Code, such discount is includable in taxable income of the
Unitholders on an accrual basis computed daily, without regard to when payments
of interest on such Bonds are received. The Code provides a complex set of rules
regarding the accrual of original issue discount. These rules provide that
original issue discount generally accrues on the basis of a constant compound
interest rate over the term of the Bonds. Unitholders should consult their tax
advisers as to the amount of original issue discount which accrues.
16
<PAGE>
Special original issue discount rules apply if the purchase price of the Bond by
the Trust exceeds its original issue price plus the amount of original issue
discount which would have previously accrued based upon its issue price (its
"adjusted issue price"). Similarly these special rules would apply to a
Unitholder if the tax basis of his pro rata portion of a Bond issued with
original issue discount exceeds his pro rata portion of its adjusted issue
price. Unitholders should also consult their tax advisers regarding these
special rules.
It is possible that a corporate Bond that has been issued at an original issue
discount may be characterized as a "high-yield discount obligation" within the
meaning of Section 163(e)(5) of the Code. To the extent that such an obligation
is issued at a yield in excess of six percentage points over the applicable
Federal rate, a portion of the original issue discount on such obligation will
be characterized as a distribution on stock (e.g. dividends) for purposes of the
dividends received deduction which is available to certain corporations with
respect to certain dividends received by such corporation.
Market Discount. If a Unitholder's tax basis in his pro rata portion of Bonds is
less than the allocable portion of such Bond's stated redemption price at
maturity (or, if issued with original issue discount, the allocable portion of
its "revised issue price"), such difference will constitute market discount
unless the amount of market discount is "de minimis" as specified in the Code.
Market discount accrues daily computed on a straight line basis, unless the
Unitholder elects to calculate accrued market discount under a constant yield
method. Unitholders should consult their tax advisors regarding whether such
election should be made and as to the amount of market discount which accrues.
Accrued market discount is generally includable in taxable income to the
Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on the Bonds, on the sale, maturity or disposition of
such Bonds by the Trust, and on the sale by a Unitholder of Units, unless a
Unitholder elects to include the accrued market discount in taxable income as
such discount accrues. If a Unitholder does not elect to annually include
accrued market discount in taxable income as it accrues, deductions for any
interest expense incurred by the Unitholder which is incurred to purchase or
carry his Units will be reduced by such accrued market discount. In general, the
portion of any interest expense which was not currently deductible would
ultimately be deductible when the accrued market discount is included in income.
Unitholders should consult their tax advisers regarding whether an election
should be made to include market discount in income as it accrues and as to the
amount of interest expense which may not be currently deductible.
Computation of the Unitholder's Tax Basis. The tax basis of a Unitholder with
respect to his interest in a Bond is increased by the amount of original issue
discount (and market discount, if the Unitholder elects to include market
discount, if any, on the Bonds held by the Trust in income as it accrues)
thereon properly included in the Unitholder's gross income as determined for
Federal income tax purposes and reduced by the amount of any amortized premium
which the Unitholder has properly elected to amortize under Section 171 of the
Code. A Unitholder's tax basis in his Units will equal his tax basis in his pro
rata portion of all of the assets of the Trust.
Recognition of Taxable Gain or Loss Upon Disposition of Obligations by the Trust
or Disposition of Units. A Unitholder will recognize taxable capital gain (or
loss) when all or part of his pro rata interest in a Bond is disposed of in a
taxable transaction for an amount greater (or less) than his tax basis therefor.
As previously discussed, gain realized on the disposition of the interest of a
Unitholder in any Bond deemed to have been acquired with market discount will be
treated as ordinary income to the extent the gain does not exceed the amount of
accrued market discount not previously taken into income. Any capital gain or
17
<PAGE>
loss arising from the disposition of a Bond by the Trust or the disposition of
Units by a Unitholder will be short-term capital gain or loss unless the
Unitholder has held his Units for more than one year in which case such capital
gain or loss will generally be long term. The Taxpayer Relief Act of 1997 (the
"1997 Tax Act") provides that for taxpayers other than corporations, net capital
gain (which is defined as net long-term capital gain over net short-term capital
loss for the taxable year) is subject to a maximum marginal stated tax rate of
either 28% or 20%, depending upon the holding periods of the capital assets.
Capital gain or loss is long-term if the holding period for the asset is more
than one year, and is short-term if the holding period for the asset is one year
or less. The date on which a Unit is acquired (i.e., the "trade date") is
excluded for purposes for determining the holding period of the Unit. Generally,
capital gains realized from assets held for more than one year but not more than
18 months are taxed at a maximum marginal stated tax rate of 28% and capital
gains realized from assets (with certain exclusions) held for more than 18
months are taxed at a maximum marginal stated tax rate of 20% (10% in the case
of certain taxpayers in the lowest tax bracket). Further, capital gains realized
from assets held for one year or less are taxed at the same rates as ordinary
income. Legislation is currently pending that provides the appropriate
methodology that should be applied in netting the realized capital gains and
losses. Such legislation is proposed to be effective retroactively for tax years
ending after May 6, 1997. In addition, it should be noted that legislative
proposals are introduced from time to time that affect tax rates and could
affect relative differences at which ordinary income and capital gains are
taxed. The tax basis reduction requirements of the Code relating to amortization
of bond premium may under some circumstances, result in the Unitholder realizing
taxable gain when his Units are sold or redeemed for an amount equal to or less
than his original cost.
The 1997 Tax Act treats certain transactions designed to eliminate or reduce
risk of loss and opportunities for gain (e.g. short sales, offsetting notional
principal contracts, futures or forwards contracts, or similar transactions) as
constructive sales for purposes of recognition of gain (but not loss) and for
purposes of determining holding period. Unitholders should consult their own tax
advisers with regard to any such constructive sales rules and the effect of the
1997 Tax Act on their investment in a Unit.
If the Unitholder disposes of a Unit, he is deemed thereby to have disposed of
his entire pro rata interest in all Trust assets including his pro rata portion
of all of the Bonds represented by the Unit. This may result in a portion of the
gain, if any, on such sale being taxable as ordinary income under the market
discount rules (assuming no election was made by the Unitholder to include
market discount in income as it accrues) as previously discussed.
"The Revenue Reconciliation Act of 1993" (the "1993 Tax Act") raised tax rates
on ordinary income while capital gains remain subject to a 28 percent maximum
stated rate for taxpayers other than corporations. Because some or all capital
gains are taxed at a comparatively lower rate under the 1993 Tax Act, the 1993
Tax Act includes a provision that characterizes capital gains as ordinary income
in the case of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
Foreign Investors. A Unitholder who is a foreign investor (i.e., an investor
other than a U.S. citizen or resident or a U.S. corporation, partnership, estate
or trust) will generally not be subject to United States federal income taxes,
including withholding taxes, on interest income (including any original issue
discount) on, or any gain from the sale or other disposition of, his pro rata
interest in any Bond or the sale of his Units provided that all of the following
conditions are met: (i) the interest income or gain is not effectively connected
18
<PAGE>
with the conduct by the foreign investor of a trade or business within the
United States, (ii) if the interest is United States source income (which is the
case for most securities issued by United States issuers), and the Bond is
issued after July 18, 1984 (which is the case for each Bond held by the Trust),
the foreign investor does not own, directly or indirectly, 10% or more of the
total combined voting power of all classes of voting stock of the issuer of the
Bond and the foreign investor is not a controlled foreign corporation related
(within the meaning of Section 864(d)(4) of the Code) to the issuer of the Bond,
(iii) with respect to any gain, the foreign investor (if an individual) is not
present in the United States for 183 days or more during his or her taxable year
and (iv) the foreign investor provides all certification which may be required
of his status (foreign investors may contact the Sponsor to obtain a Form W-8
which must be filed with the Trustee and refiled every three calendar years
thereafter). Foreign investors should consult their tax advisers with respect to
United States tax consequences of ownership of Units.
It should be noted that payments to the Trust of interest on the Bonds of
foreign governments may be subject to foreign withholding taxes and Unitholders
should consult their tax advisers regarding the potential tax consequences
relating to the payment of any such withholding taxes by the Trust. Any interest
withheld as a result thereof may nevertheless be treated as income to the
Unitholders. Because, under the grantor trust rules, an investor is deemed to
have paid directly his share of foreign taxes that have been paid or accrued, if
any, an investor may be entitled to a foreign tax credit or deduction for United
States tax purposes with respect to such taxes. The 1997 Act imposes a required
holding period for such credits. In addition, the Bonds may provide for
Additional Payments to investors intended to compensate them for any foreign tax
liability. Any such Additional Payments received by the Trust would constitute
taxable income to the Unitholders. Investors should consult their tax advisers
with respect to foreign withholding taxes and foreign tax credits.
It should be noted that the 1993 Tax Act includes a provision which eliminates
the exemption from United States taxation, including withholding taxes, for
certain "contingent interest." The provision applies to interest received after
December 31, 1993. No opinion is expressed herein regarding the potential
applicability of this provision and whether United States taxation or
withholding taxes could be imposed with respect to income derived from the Units
as a result thereof. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
General. Each Unitholder (other than a foreign investor who has properly
provided the certifications described above) will be requested to provide the
Unitholder's taxpayer identification number to the Trustee and to certify that
the Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by the
Trust to such Unitholder (including amounts received upon the redemption of the
Units) will be subject to back-up withholding.
The foregoing discussion relates only to United States Federal income taxes;
Unitholders may be subject to state and local taxation in other jurisdictions
(including a foreign investor's country of residence). Unitholders should
consult their tax advisers regarding potential state, local, or foreign taxation
with respect to the Units.
TAX REPORTING AND REALLOCATION
Because the Trust receives interest and makes monthly distributions based upon
the Trust's expected total collections of interest and any anticipated expenses,
certain tax reporting consequences may arise. The Trust is required to report
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<PAGE>
Unitholder information to the Internal Revenue Service ("IRS"), based upon the
actual collection of interest by the Trust on the securities in the Trust,
without regard to the Trust's expenses or to the Trust's payments to Unitholders
during the year. If distributions to Unitholders exceed interest collected, the
difference will be reported as a return of principal which will reduce a
Unitholder's cost basis in its Units (and its pro rata interest in the
securities in the Trust). A Unitholder must include in taxable income the amount
of income reported by the Trust to the IRS regardless of the amount distributed
to such Unitholder. If a Unitholder's share of taxable income exceeds income
distributions made by the Trust to such Unitholder, such excess is in all
likelihood attributable to the payment of miscellaneous expenses of the Trust
which will not be deductible by an individual Unitholder as an itemized
deduction except to the extent that the total amount of certain itemized
deductions, such as investment expenses (which would include the Unitholder's
share of Trust expenses), tax return preparation fees and employee business
expenses, exceeds 2% of such Unitholder's adjusted gross income. Alternatively,
in certain cases, such excess may represent an increase in the Unitholder's tax
basis in the Units owned. Investors with questions regarding these issues should
consult with their tax advisers.
TRUST INFORMATION
Because certain of the Securities may from time to time under certain
circumstances be sold or redeemed or will mature in accordance with their terms
and because the proceeds from such events will be distributed to Unitholders and
will not be reinvested, no assurance can be given that the Trust will retain for
any length of time its present size and composition. Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any
Security. In the event of a failure to deliver any Security that has been
purchased for the Trust under a contract, including those securities purchased
on a "when, as and if issued" basis ("Failed Securities"), the Sponsor is
authorized under the Trust Agreement to direct the Trustee to acquire other
securities ("Replacement Securities") to make up the original corpus of the
Trust.
Securities may have been purchased on a "when, as and if issued" or delayed
delivery basis with delivery expected to take place after the First Settlement
Date. See "Notes to Portfolio." Accordingly, the delivery of such Securities
may be delayed or may not occur. Interest on these Securities begins accruing to
the benefit of Unitholders on their respective dates of delivery. Unitholders
will be "at risk" with respect to any "when, as and if issued" or "delayed
delivery" Securities (i.e., may derive either gain or loss from fluctuations in
the evaluation of such Securities) from the date they commit for Units.
The Replacement Securities must be purchased within 20 days after delivery of
the notice that a contract to deliver a Security will not be honored and the
purchase price may not exceed the amount of funds reserved for the purchase of
the Failed Securities. The Replacement Securities (i) must be payable in United
States currency, (ii) must be purchased at a price that results in a yield to
maturity and a current return at least equal to that of the Failed Securities as
of the Initial Date of Deposit, (iii) shall not be "when, as and if issued" or
restricted securities, (iv) must satisfy any rating criteria for Securities
originally included in the Trust, (v) must be bonds, debentures, notes or other
straight debt obligations (whether secured or unsecured and whether senior or
subordinated) without equity or other conversion features, with fixed maturity
dates substantially the same as those of the Failed Securities having no
warrants or subscription privileges attached and (vi) be issued after July 18,
1984 if interest thereon is United States source income. Whenever a Replacement
Security is acquired, the Trustee shall, within five days thereafter, notify all
Unitholders of the Trust of the acquisition of the Replacement Security and
shall, on the next monthly distribution date which is more than 30 days
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<PAGE>
thereafter, make a pro rata distribution of the amount, if any, by which the
cost to the Trust of the Failed Security exceeded the cost of the Replacement
Security. Once all of the Securities are acquired, the Trustee will have no
power to vary the investments of the Trust, i.e., the Trustee will have no
managerial power to take advantage of market variations to improve a
Unitholder's investment.
If the right of limited substitution described in the preceding paragraphs is
not utilized to acquire Replacement Securities in the event of a failed
contract, the Sponsor will refund the sales charge attributable to such Failed
Securities to all Unitholders and the Trustee will distribute the principal and
accrued interest attributable to such Failed Securities not more than 30 days
after the date on which the Trustee would have been required to purchase a
Replacement Security. In addition, Unitholders should be aware that, at the time
of receipt of such principal, they may not be able to reinvest such proceeds in
other securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unitholders.
Whether or not a Replacement Security is acquired, an amount equal to the
accrued interest (at the coupon rate of the Failed Securities) will be paid to
Unitholders to the date the Sponsor removes the Failed Securities from the Trust
if the Sponsor determines not to purchase a Replacement Security or to the date
of substitution if a Replacement Security is purchased. All such interest paid
to Unitholders which accrued after the date of settlement for a purchase of
Units will be paid by the Sponsor. In the event a Replacement Security could not
be acquired by the Trust, the net annual interest income per Unit for the Trust
would be reduced and the Estimated Current Return and Estimated Long-Term Return
might be lowered.
Subsequent to the Initial Date of Deposit, a Security may cease to be rated or
its rating may be reduced below any minimum required as of the Initial Date of
Deposit. Neither event requires the elimination of such investment from the
Trust, but may be considered in the Sponsor's determination to direct the
Trustee to dispose of such investment. See "Investment Supervision."
The Sponsor may not alter the portfolio of the Trust except upon the happening
of certain extraordinary circumstances. See "Investment Supervision." Certain of
the Securities may be subject to optional call or mandatory redemption pursuant
to sinking fund provisions, in each case prior to their stated maturity. A bond
subject to optional call is one which is subject to redemption or refunding
prior to maturity at the option of the issuer, often at a premium over par. A
refunding is a method by which a bond issue is redeemed, at or before maturity,
by the proceeds of a new bond issue. A bond subject to sinking fund redemption
is one which is subject to partial call from time to time at par with proceeds
from a fund accumulated for the scheduled retirement of a portion of an issue to
maturity. Special or extraordinary redemption provisions may provide for
redemption at par of all or a portion of an issue upon the occurrence of certain
circumstances, which may be prior to the optional call dates shown under
"Portfolio." Redemption pursuant to optional call provisions is more likely to
occur, and redemption pursuant to special or extraordinary redemption provisions
may occur, when the Securities have an offering side evaluation which represents
a premium over par, that is, when they are able to be refinanced at a lower
cost. The proceeds from any such call or redemption pursuant to sinking fund
provisions, as well as proceeds from the sale of Securities and from Securities
which mature in accordance with their terms from the Trust, unless utilized to
pay for Units tendered for redemption, will be distributed to Unitholders and
will not be used to purchase additional Securities. Accordingly, any such call,
redemption, sale or maturity will reduce the size and diversity of the Trust and
the net annual interest income of the Trust and may reduce the Estimated Current
Return and the Estimated Long-Term Return. See "Interest, Estimated Long-Term
Return and Estimated Current Return." The call, redemption, sale or maturity of
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<PAGE>
Securities also may have tax consequences to a Unitholder. See "Federal Tax
Status." Information with respect to the call provisions and maturity dates of
the Securities is contained in "Portfolio."
Each Unit represents an undivided fractional interest in the Securities, in the
ratio shown under "Essential Information." Units may be purchased and
certificates, if requested, will be issued in denominations of one Unit or any
multiple or fraction thereof, subject to the Trust's minimum investment
requirement. Fractions of Units will be computed to three decimal points. To the
extent that Units are redeemed, the principal amount of Securities in the Trust
will be reduced and the undivided fractional interest represented by each
outstanding Unit will increase. See "Redemption."
Certain of the Securities may have been acquired at a market discount from par
value at maturity. The coupon interest rates on the discount securities at the
time they were purchased and deposited in the Trust were lower than the current
market interest rates for newly issued bonds of comparable rating and type. If
such interest rates for newly issued comparable securities increase, the market
discount of previously issued securities will become greater, and if such
interest rates for newly issued comparable securities decline, the market
discount of previously issued securities will be reduced, other things being
equal. Investors should also note that the value of securities purchased at a
market discount will increase in value faster than securities purchased at a
market premium if interest rates decrease. Conversely, if interest rates
increase, the value of securities purchased at a market discount will decrease
faster than securities purchased at a market premium. In addition, if interest
rates rise, the prepayment risk of higher yielding, premium securities and the
prepayment benefit for lower yielding, discount securities will be reduced. A
discount security held to maturity will have a larger portion of its total
return in the form of taxable income and capital gain and loss in the form of
tax-exempt interest income than a comparable security newly issued at current
market rates. See "Federal Tax Status." Market discount attributable to interest
changes does not indicate a lack of market confidence in the issue. Neither the
Sponsor nor the Trustee shall be liable in any way for any default, failure or
defect in any of the Securities.
Certain of the Securities may be "zero coupon" bonds, i.e., an original issue
discount bond that does not provide for the payment of current interest. Zero
coupon bonds are purchased at a deep discount because the buyer receives only
the right to receive a final payment at the maturity of the bond and does not
receive any periodic interest payments. The effect of owning deep discount bonds
which do not make current interest payments (such as the zero coupon bonds) is
that a fixed yield is earned not only on the original investment but also, in
effect, on all discount earned during the life of such obligation. This implicit
reinvestment of earnings at the same rate eliminates the risk of being unable to
reinvest the income on such obligation at a rate as high as the implicit yield
on the discount obligation, but at the same time eliminates the holder's ability
to reinvest at higher rates in the future. For this reason, zero coupon bonds
are subject to substantially greater price fluctuations during periods of
changing market interest rates than are securities of comparable quality which
pay interest currently. For the Federal tax consequences of original issue
discount securities such as the zero coupon bonds, see "Federal Tax Status."
To the best of the Sponsor's knowledge, there is no litigation pending as of the
Initial Date of Deposit in respect of any Security which might reasonably be
expected to have a material adverse effect on the Trust. At any time after the
Initial Date of Deposit, litigation may be instituted on a variety of grounds
with respect to the Securities. The Sponsor is unable to predict whether any
such litigation may be instituted, or if instituted, whether such litigation
might have a material adverse effect on the Trust. The Sponsor and the Trustee
shall not be liable in any way for any default, failure or defect in any
Security.
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<PAGE>
RETIREMENT PLANS
Units may be well suited for purchase by Individual Retirement Accounts, Keogh
Plans, pension funds and other qualified retirement plans. Generally, capital
gains and income received under each of the foregoing plans are deferred from
federal taxation. All distributions from such plans are generally treated as
ordinary income but may, in some cases, be eligible for special income averaging
or tax-deferred rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and should consult
their attorneys or tax advisers with respect to the establishment and
maintenance of any such plan. Such plans are offered by brokerage firms and
other financial institutions. The Trust will waive the $1,000 minimum investment
requirement for IRA accounts. The minimum investment is $250 for tax-deferred
plans such as IRA accounts. Fees and charges with respect to such plans may
vary.
The Trustee has agreed to act as custodian for certain retirement plan accounts.
An annual fee of $12.00 per account, if not paid separately, will be assessed by
the Trustee and paid through the liquidation of shares of the reinvestment
account. An individual wishing the Trustee to act as custodian must complete an
Ranson UIT/IRA application and forward it along with a check made payable to The
Bank of New York. Certificates for Individual Retirement Accounts cannot be
issued.
DISTRIBUTION REINVESTMENT
Each Unitholder may elect to have distributions of principal (including capital
gains, if any) or interest or both automatically invested without charge in
shares of any mutual fund which is registered in such Unitholder's state of
residence and is underwritten or advised by Zurich Kemper Investments, Inc. (the
"Kemper Funds"), other than those Kemper Funds sold with a contingent deferred
sales charge.
If individuals indicate they wish to participate in the Reinvestment Program but
do not designate a reinvestment fund, the Program Agent referred to below will
contact such individuals to determine which reinvestment fund or funds they wish
to elect. Since the portfolio securities and investment objectives of such
Kemper Funds generally will differ significantly from that of the Trust,
Unitholders should carefully consider the consequences before selecting such
Kemper Funds for reinvestment. Detailed information with respect to the
investment objectives and the management of the Funds is contained in their
respective prospectuses, which can be obtained from the Sponsor upon request. An
investor should read the prospectus of the reinvestment fund selected prior to
making the election to reinvest. Unitholders who desire to have such
distributions automatically reinvested should inform their broker at the time of
purchase or should file with the Program Agent a written notice of election.
Unitholders who are receiving distributions in cash may elect to participate in
distribution reinvestment by filing with the Program Agent an election to have
such distributions reinvested without charge. Such election must be received by
the Program Agent at least ten days prior to the Record Date applicable to any
distribution in order to be in effect for such Record Date. Any such election
shall remain in effect until a subsequent notice is received by the Program
Agent. See "Unitholders-Distributions to Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participation in distribution reinvestment should be directed to the Program
Agent at its corporate trust office.
23
<PAGE>
INTEREST, ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN
As of the opening of business on the Initial Date of Deposit, the Estimated
Long-Term Return and the Estimated Current Return were as set forth in the
"Essential Information." Estimated Current Return is calculated by dividing the
estimated net annual interest income per Unit by the Public Offering Price. The
estimated net annual interest income per Unit will vary with changes in fees
and expenses of the Trustee, the Sponsor and the Evaluator and with the
principal prepayment, redemption, maturity, exchange or sale of the Securities
while the Public Offering Price will vary with changes in the offering price of
the underlying Securities and accrued interest; therefore, there is no
assurance that the present Estimated Current Return will be realized in the
future. Estimated Long-Term Return is calculated using a formula which (1)
takes into consideration, and determines and factors in the relative
weightings of, the market values, yields (which takes into account the
amortization of premiums and the accretion of discounts) and estimated
retirements or average life of all of the Securities and (2) takes into
account the expenses and sales charge associated with the Trust Unit. Since
the market values and estimated retirements of the Securities and the
expenses of the Trust will change, there is no assurance that the
present Estimated Long-Term Return will be realized in the future. Estimated
Current Return and Estimated Long-Term Return are expected to differ because the
calculation of Estimated Long-Term Return reflects the estimated date and amount
of principal returned while Estimated Current Return calculations include only
net annual interest income and Public Offering Price.
In order to acquire certain of the Securities, it may be necessary for the
Sponsor or Trustee to pay on the dates for delivery of such Securities amounts
covering accrued interest on such Securities which exceed the amount which will
be made available in the letter of credit furnished by the Sponsor on the
Initial Date of Deposit. The Trustee has agreed to pay any amounts necessary to
cover any such excess and will be reimbursed therefor, without interest, when
funds become available from interest payments on the Securities.
PUBLIC OFFERING OF UNITS
Public Offering Price. Units are offered at the Public Offering Price thereof.
During the initial offering period, the Public Offering Price per Unit is equal
to the aggregate of the offering side evaluations of the Securities plus or
minus a pro rata share of cash, if any, in the Principal account held or owned
by the Trust plus accrued interest plus the applicable sales charge referred to
in the tables below divided by the number of outstanding Units. The Public
Offering Price for secondary market transactions, on the other hand, is based on
the aggregate bid side evaluations of the Securities in a Trust plus or minus
cash, if any, in the Principal Account held or owned by the Trust, plus accrued
interest plus a sales charge based upon the dollar weighted average maturity of
the Trust.
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<PAGE>
The sales charge per Unit will be reduced during the initial offering period
pursuant to the following graduated scale:
<TABLE>
<CAPTION>
Weighted Average Years to Maturity
-------------------------------------------------------
Under 5 Years 5 to 14.99 Years
------------------------- -------------------------
Percent of Percent of Percent of Percent of
Offering Net Amount Offering Net Amount
Number of Units Price Invested Price Invested
- --------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1 to 9,999 Units 3.9% 4.058% 4.5% 4.712%
10,000 to 24,999 Units 3.7 3.842 4.2 4.384
25,000 to 49,999 Units 3.5 3.627 4.0 4.167
50,000 to 99,999 Units 3.3 3.413 3.5 3.627
100,000 or more Units 2.0 2.001 2.2 2.249
</TABLE>
As indicated above, in connection with secondary market transactions the sales
charge is based upon the dollar weighted average maturity of the Trust and is
determined in accordance with the tables set forth below. For purposes of this
computation, Securities will be deemed to mature on their expressed maturity
dates unless: (a) the Securities have been called for redemption or funds or
securities have been placed in escrow to redeem them on an earlier call date, in
which case such call date will be deemed to be the date upon which they mature;
or (b) such Securities are subject to a "mandatory tender," in which case such
mandatory tender will be deemed to be the date upon which they mature. The
effect of this method of sales charge computation will be that different sales
charge rates will be applied to the Trust based upon the dollar weighted average
maturity of the Trust's portfolio, in accordance with the following schedule.
In connection with secondary market transactions the sales charge per Unit will
be reduced as set forth below:
<TABLE>
<CAPTION> Secondary
-----------------------------------------------
Dollar Weighted Average Years to Maturity*
2 to 3.99 4 to 9.99 10 or more
-----------------------------------------------
Dollar Amount of Trade Sales Charge (Percent of Public Offering Price)
---------------------- -----------------------------------------------
<S> <C> <C> <C>
$1,000 to $99,999 3.50% 4.50% 5.50%
$100,000 to $499,999 3.25 4.25 5.00
$500,000 to $999,999 3.00 4.00 4.50
$1,000,000 or more 2.75 3.75 4.00
- --------------------
<FN>
* If the dollar weighted average maturity of the Trust is from 1 to 1.99 years,
the sales charge is 2% and 1.5% of the Public Offering Price for purchases of
$1,000 to $249,999 and $250,000 or more, respectively.
</FN>
</TABLE>
The reduced sales charges resulting from quantity discounts as shown in the
tables above will apply to all purchases of Units on any one day by the same
purchaser from the same dealer and for this purpose purchases of Units of a
Trust will be aggregated with concurrent purchases of Units of any other unit
investment trust that may be offered by the Sponsor. In addition, during the
initial offering period only, the reduced sales charges resulting from quantity
discounts as shown in the table above will apply to all purchases of Units by
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<PAGE>
the same person on such person's initial purchase date or on any day subsequent
to such initial purchase date, provided that the person purchasing the Units
purchased at least 25,000 Units on such initial purchase date; to determine the
applicable sales charge reduction it is necessary to accumulate all purchases
made on the purchaser's initial purchase date and all purchases made subsequent
to such initial purchase date.
For purposes of the reduced sales charges from quantity discounts, Units
purchased in the name of a spouse or child (under 21) of such purchaser will be
deemed to be additional purchases by such purchaser. The reduced sales charges
will also be applicable to a trust or other fiduciary purchasing for a single
trust estate or single fiduciary account.
Units may be purchased in the primary or secondary market at the Public Offering
Price less the concession the Sponsor typically allows to dealers and other
selling agents for purchases (see "Public Distribution of Units") by investors
who purchase Units through registered investment advisers, certified financial
planners or registered broker-dealers who in each case either charge periodic
fees for financial planning, investment advisory or asset management services,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed.
A purchaser desiring to purchase during a 13 month period $500,000 or more of
any combination of series of Ranson Unit Investment Trusts may qualify for a
reduced sales charge by signing a nonbinding Letter of Intent with any single
broker-dealer. After signing a Letter of Intent, at the date total purchases,
less redemptions, of units of any combination of series of Ranson Unit
Investment Trusts by a purchaser (including units purchased in the name of the
spouse of a purchaser or in the name of a child of such purchaser under 21 years
of age) exceed $500,000, the selling broker-dealer, bank or other will credit
the unitholder with cash as a retroactive reduction of the sales charge on such
units equal to the amount which would have been paid for the total aggregated
sale amount. If a purchaser does not complete the required purchases under the
Letter of Intent within the 13 month period, no such retroactive sales charge
reduction shall be made. To qualify as a purchase under a Letter of Intent each
purchase of units of Ranson Unit Investment Trusts must equal or exceed
$100,000.
Unitholders of the various series of Ranson or EVEREN Unit Investment Trusts
Insured Corporate Series who meet the conditions in the next succeeding sentence
may, during the primary offering period of an Investment Grade Series or a High
Yield Series only, acquire Units of such Series at the reduced sales charge
equivalent to purchases during the initial offering period of 100,000 or more
Units. First, the special sales charge discount only applies to purchases
acquired with funds received from distributions of unscheduled principal
payments in connection with units issued in such series and, second, the minimum
purchase must be at least $1,000.
The Sponsor intends to permit officers, directors and employees of the Sponsor
and Evaluator and, at the discretion of the Sponsor, registered representatives
of selling firms to purchase Units without a sales charge, although a
transaction processing fee may be imposed on such trades.
Had Units been available for sale at the opening of business on the Initial Date
of Deposit, the Public Offering Price would have been as shown under "Essential
Information." The Public Offering Price per Unit on the date of this Prospectus
or on any subsequent date will vary from the amount stated under "Essential
Information" in accordance with fluctuations in the prices of the underlying
Securities and the amount of accrued interest on the Units. On the Initial Date
of Deposit, pursuant to an exemptive order from the Securities and Exchange
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<PAGE>
Commission, the Public Offering Price at which Units will be sold will not
exceed the price determined as of the opening of business on the Initial Date of
Deposit as shown under "Essential Information"; however, should the value of the
underlying Securities decline, purchasers will, of course, be given the benefit
of such lower price. The aggregate bid and offering side evaluations of the
Securities shall be determined (a) on the basis of current bid or offering
prices of the Securities, (b) if bid or offering prices are not available for
any particular Security, on the basis of current bid or offering prices for
comparable bonds, (c) by determining the value of Securities on the bid or offer
side of the market by appraisal, or (d) by any combination of the above.
The foregoing evaluations and computations shall be made as of the evaluation
time stated under "Essential Information," on each business day commencing with
the Initial Date of Deposit of the Securities, effective for all sales made
during the preceding 24-hour period.
The interest on the Securities deposited in the Trust, less the related
estimated fees and expenses, is estimated to accrue in the annual amounts per
Unit set forth under "Essential Information." The amount of net interest income
which accrues per Unit may change as Securities mature or are redeemed,
exchanged or sold, or as the expenses of the Trust change or the number of
outstanding Units changes.
Although payment is normally made three business days following the order for
purchase, payments may be made prior thereto. A person will become the owner of
Units on the date of settlement provided payment has been received. Cash, if
any, made available to the Sponsor prior to the date of settlement for the
purchase of Units may be used in the Sponsor's business and may be deemed to be
a benefit to the Sponsor, subject to the limitations of the Securities Exchange
Act of 1934. If a Unitholder desires to have certificates representing Units
purchased, such certificates will be delivered as soon as possible following his
written request therefor. For information with respect to redemption of Units
purchased, but as to which certificates requested have not been received, see
"Redemption" below.
Accrued Interest. Accrued interest is the accumulation of unpaid interest on a
security from the last day on which interest thereon was paid. Interest on
Securities generally is paid semi-annually (monthly in the case of Ginnie Maes,
if any) although the Trust accrues such interest daily. Because of this, the
Trust always has an amount of interest earned but not yet collected by the
Trustee. For this reason, with respect to sales settling subsequent to the First
Settlement Date, the Public Offering Price of Units will have added to it the
proportionate share of accrued interest to the date of settlement. Unitholders
will receive on the next distribution date the amount, if any, of accrued
interest paid on their Units.
In an effort to reduce the amount of accrued interest which would otherwise have
to be paid in addition to the Public Offering Price in the sale of Units to the
public, the Trustee will advance the amount of accrued interest as of the First
Settlement Date and the same will be distributed to the Sponsor as the
Unitholder of record as of the First Settlement Date. Consequently, the amount
of accrued interest to be added to the Public Offering Price of Units will
include only accrued interest from the First Settlement Date to the date of
settlement, less any distributions from the Interest Account subsequent to the
First Settlement Date.
Because of the varying interest payment dates of the Securities, accrued
interest at any point in time will be greater than the amount of interest
actually received by the Trust and distributed to Unitholders. Therefore, there
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<PAGE>
will always remain an item of accrued interest that is added to the value of the
Units. If a Unitholder sells or redeems all or a portion of his Units, he will
be entitled to receive his proportionate share of the accrued interest from the
purchaser of his Units. Since the Trustee has the use of the funds held in the
Interest Account for distributions to Unitholders and since such Account is
noninterest-bearing to Unitholders, the Trustee benefits thereby.
Comparison of Public Offering Price and Redemption Price. While the Initial
Public Offering Price of Units will be determined on the basis of the current
offering prices of the Securities, the redemption price per Unit (as well as the
secondary market price per Unit) at which Units may be redeemed (see
"Redemption") will be determined on the basis of the current bid prices of the
Securities. As of the opening of business on the Initial Date of Deposit, the
Public Offering Price per Unit (based on the offering prices of the Securities
and including the sales charge) exceeded the redemption price at which Units
could have been redeemed (based upon the current bid prices of the Securities)
by the amount shown under "Essential Information." In the past, bid prices on
securities similar to those in the Trust have been lower than the offering
prices thereof by as much as 5% or more of principal amount in the case of
inactively traded bonds or as little as 1/2 of 1% in the case of actively traded
bonds, but the difference between such offering and bid prices may be expected
to average 3% to 4% of principal amount. For this reason, among others
(including fluctuations in the market prices of the Securities and the fact that
the Public Offering Price includes a sales charge), the amount realized by a
Unitholder upon any redemption of Units may be less than the price paid for such
Units.
Public Distribution of Units. The Sponsor intends to qualify the Units for sale
in a number of states. Units will be sold through dealers who are members of the
National Association of Securities Dealers, Inc. and through others. Sales may
be made to or through dealers at prices which represent discounts from the
Public Offering Price as set forth below. Certain commercial banks are making
Units available to their customers on an agency basis. A portion of the sales
charge paid by their customers is retained by or remitted to the banks in the
amount shown in the tables below. Under the Glass-Steagall Act, banks are
prohibited from underwriting Units; however, the Glass-Steagall Act does permit
certain agency transactions and the banking regulators have indicated that these
particular agency transactions are permitted under such Act. In addition, state
securities laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law. The Sponsor reserves the right to
change the discounts set forth below from time to time. In addition to such
discounts, the Sponsor may, from time to time, pay or allow an additional
discount, in the form of cash or other compensation, to dealers employing
registered representatives who sell, during a specified time period, a minimum
dollar amount of Units of the Trust and other unit investment trusts created by
the Sponsor. The difference between the discount and the sales charge will be
retained by the Sponsor.
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<PAGE>
The primary market concessions or agency commissions are as follows:
<TABLE>
<CAPTION>
Primary Market
--------------------------------------------------------------------------
Volume Discounts per Unit*
-----------------------------------------------------
Regular Firm Sales or Firm Sales or Firm Sales or
Concession or Sale Sale Sale
Agency Arrangements Arrangements Arrangements
Commission 25,000 to 49,999 50,000 to 99,999 100,000 or more
--------------- ---------------- ---------------- ---------------
Weighted Average Years to Maturity
Under 5 to Under 5 to Under 5 to Under 5 to
Number of $10 Units 5 14.99 5 14.99 5 14.99 5 14.99
- ---------------------- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 to 9,999 Units 2.70% 3.00% 2.80% 3.20% 2.90% 3.30% 3.00% 3.40%
10,000 to 24,999 Units 2.50 2.90 2.60 3.00 2.70 3.10 2.80 3.20
25,000 to 49,999 Units 2.30 2.80 2.40 2.90 2.50 2.90 2.60 3.00
50,000 to 99,999 Units 2.20 2.40 2.30 2.50 2.30 2.50 2.30 2.50
100,000 or more Units 1.10 1.20 1.20 2.10 1.20 2.10 1.20 2.10
- --------------------
<FN>
* Volume concessions of up to the amount shown can be earned as a marketing
allowance at the discretion of the Sponsor during the initial one month
period after the Initial Date of Deposit by firms who reach cumulative firm
sales or sales arrangement levels of at least $250,000. After a firm has met
the minimum $250,000 volume level, volume concessions may be given on all
trades originated from or by that firm, including those placed prior to
reaching the $250,000 level, and may continue to be given during the entire
initial offering period. Firm sales of any Investment Grade Series or High
Yield Series issued simultaneously can be combined for the purposes of
achieving the volume discount. Only sales through Ranson & Associates, Inc.
qualify for volume discounts and secondary purchases do not apply. The
Sponsor reserves the right to modify or change those parameters at any time
and make the determination of which firms qualify for the marketing allowance
and the amount paid.
</FN>
</TABLE>
The Sponsor reserves the right to reject, in whole or in part, any order for the
purchase of Units.
Profits of Sponsor. The Sponsor will receive gross sales charges equal to the
percentage of the Offering Price of the Units stated under "Public Offering
Price" and will pay a fixed portion of such sales charges to dealers and agents.
In addition, the Sponsor may realize a profit or a loss resulting from the
difference between the purchase prices of the Securities to the Sponsor and the
cost of such Securities to the Trust, which is based on the offering side
evaluation of the Securities. See "Portfolio." The Sponsor may also realize
profits or losses with respect to Securities deposited in the Trust which were
acquired from underwriting syndicates of which the Sponsor was a member. An
underwriter or underwriting syndicate purchases securities from the issuer on a
negotiated or competitive bid basis, as principal, with the motive of marketing
such securities to investors at a profit. The Sponsor may realize additional
profits or losses during the initial offering period on unsold Units as a result
of changes in the daily evaluation of the Securities.
Market for Units. After the initial offering period, while not obligated to do
so, the Sponsor intends to, subject to change at any time, maintain a market for
Units offered hereby and to continuously offer to purchase said Units at prices,
determined by the Evaluator, based on the aggregate bid prices of the underlying
Securities, together with accrued interest to the expected dates of settlement.
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<PAGE>
To the extent that a market is maintained during the initial offering period,
the prices at which Units will be repurchased will be based upon the aggregate
offering side evaluation of the Securities. The aggregate bid prices of the
underlying Securities are expected to be less than the related aggregate
offering prices (which is the evaluation method used during the initial public
offering period). Accordingly, Unitholders who wish to dispose of their Units
should inquire of their bank or broker as to current market prices in order to
determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof.
The offering price of any Units resold by the Sponsor will be in accord with
that described in the currently effective Prospectus describing such Units. Any
profit or loss resulting from the resale of such Units will belong to the
Sponsor. The Sponsor may suspend or discontinue purchases of Units if the supply
of Units exceeds demand, or for other business reasons.
REDEMPTION
A Unitholder who does not dispose of Units in the secondary market described
above may cause Units to be redeemed by the Trustee by making a written request
to the Trustee, The Bank of New York, 101 Barclay Street, New York, New York
10286, and, in the case of Units evidenced by a certificate, by tendering such
certificate to the Trustee, properly endorsed or accompanied by a written
instrument or instruments of transfer in a form satisfactory to the Trustee.
Unitholders must sign the request, and such certificate or transfer instrument,
exactly as their names appear on the records of the Trustee and on any
certificate representing the Units to be redeemed. If the amount of the
redemption is $25,000 or less and the proceeds are payable to the Unitholder(s)
of record at the address of record, no signature guarantee is necessary for
redemptions by individual account owners (including joint owners). Additional
documentation may be requested, and a signature guarantee is always required,
from corporations, executors, administrators, trustees, guardians or
associations. The signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other guarantee
program in addition to, or in substitution for, STAMP, as may be accepted by the
Trustee. A certificate should only be sent by registered or certified mail for
the protection of the Unitholder. Since tender of the certificate is required
for redemption when one has been issued, Units represented by a certificate
cannot be redeemed until the certificate representing such Units has been
received by the purchasers.
Redemption shall be made by the Trustee no later than seven days following the
day on which a tender for redemption is received (the "Redemption Date") by
payment of cash equivalent to the Redemption Price, determined as set forth
below under "Computation of Redemption Price," as of the evaluation time stated
under "Essential Information," next following such tender, multiplied by the
number of Units being redeemed. Any Units redeemed shall be canceled and any
undivided fractional interest in the Trust extinguished. The price received upon
redemption might be more or less than the amount paid by the Unitholder
depending on the value of the Securities in the Trust at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a certain percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing a tax return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, any time a Unitholder elects to tender Units for redemption,
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<PAGE>
such Unitholder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing interest shall be withdrawn from the
Interest Account to the extent that funds are available for such purpose. All
other amounts paid on redemption shall be withdrawn from the Principal Account.
The Trustee is empowered to sell Securities in order to make funds available for
the redemption of Units. Such sale may be required when Securities would not
otherwise be sold and might result in lower prices than might otherwise be
realized. To the extent Securities are sold, the size and diversity of the Trust
will be reduced.
The Trustee is irrevocably authorized in its discretion, if the Sponsor does not
elect to purchase any Unit tendered for redemption, in lieu of redeeming such
Units, to sell such Units in the over-the-counter market for the account of
tendering Unitholders at prices which will return to the Unitholders amounts in
cash, net after brokerage commissions, transfer taxes and other charges, equal
to or in excess of the Redemption Price for such Units. In the event of any such
sale, the Trustee shall pay the net proceeds thereof to the Unitholders on the
day they would otherwise be entitled to receive payment of the Redemption Price.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or during which (as determined by the Securities
and Exchange Commission) trading on the New York Stock Exchange is restricted;
(2) for any period during which an emergency exists as a result of which
disposal by the Trustee of Securities is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the underlying
Securities in accordance with the Trust Agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The Trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
Computation of Redemption Price. The Redemption Price for Units is computed by
the Evaluator as of the evaluation time stated under "Essential Information"
next occurring after the tendering of a Unit for redemption and on any other
business day desired by it, by: A. adding: (1) the cash on hand in the Trust
other than cash deposited in the Trust to purchase Securities not applied to the
purchase of such Securities; (2) the aggregate value of each issue of the
Securities (including "when issued" contracts, if any) held in the Trust as
determined by the Evaluator on the basis of bid prices therefor; and (3)
interest accrued and unpaid on the Securities in the Trust as of the date of
computation; B. deducting therefrom (1) amounts representing any applicable
taxes or governmental charges payable out of the Trust and for which no
deductions have been previously made for the purpose of additions to the Reserve
Account described under "General Information-Expenses of the Trust"; (2) an
amount representing estimated accrued expenses of the Trust, including but not
limited to fees and expenses of the Trustee (including legal and auditing fees
and any insurance costs), the Evaluator, the Sponsor and bond counsel, if any;
(3) cash held for distribution to Unitholders of record as of the business day
prior to the evaluation being made; and (4) other liabilities incurred by the
Trust; and C. finally dividing the results of such computation by the number of
Units of the Trust outstanding as of the date thereof.
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<PAGE>
UNITHOLDERS
Ownership of Units. Ownership of Units will not be evidenced by certificates
unless a Unitholder, the Unitholder's registered broker/dealer or the clearing
agent for such broker/dealer makes a written request to the Trustee.
Certificates, if issued, will be so noted on the confirmation statement sent to
the Underwriter and broker. Non-receipt of such certificate(s) must be reported
to the Trustee within one year; otherwise, a 2% surety bond fee will be required
for replacement.
Units are transferable by making a written request to the Trustee and, in the
case of Units evidenced by a certificate, by presenting and surrendering such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guarantee program in addition to, or in substitution for, STAMP, as
may be accepted by the Trustee.
Units may be purchased and certificates, if requested will be issued in
denominations of one Unit subject to the minimum investment requirement of 100
Units or any whole Unit multiple thereof subject to any minimum requirement
established by the Sponsor from time to time. Any certificate issued will be
numbered serially for identification, issued in fully registered form and will
be transferable only on the books of the Trustee. The Trustee may require a
Unitholder to pay a reasonable fee, to be determined in the sole discretion of
the Trustee, for each certificate re-issued or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer or
interchange. The Trustee at the present time does not intend to charge for the
normal transfer or interchange of certificates. Destroyed, stolen, mutilated or
lost certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity (generally amounting to 3% of the market value of the Units),
affidavit of loss, evidence of ownership and payment of expenses incurred.
Distributions to Unitholders. Interest received by the Trust, including any
portion of the proceeds from a disposition of Securities which represents
accrued interest, is credited by the Trustee to the Interest Account. All other
receipts are credited by the Trustee to a separate Principal Account. The
Trustee normally has no cash for distribution to Unitholders until it receives
interest payments on the Securities in the Trust. Since interest usually is paid
semiannually, during the initial months of the Trust, the Interest Account,
consisting of accrued but uncollected interest and collected interest (cash),
will be predominantly the uncollected accrued interest that is not available for
distribution. On the dates set forth under "Essential Information," the Trustee
will commence distributions, in part from funds advanced by the Trustee.
Thereafter, assuming the Trust retains its original size and composition, after
deduction of the fees and expenses of the Trustee, the Sponsor and Evaluator and
reimbursements (without interest) to the Trustee for any amounts advanced to the
Trust, the Trustee will normally distribute on each Interest Distribution Date
(the fifteenth of the month) or shortly thereafter to Unitholders of record on
the preceding Record Date (which is the first day of each month). Unitholders of
the Trust will receive an amount substantially equal to one-twelfth of such
holders' pro rata share of the estimated net annual interest income to the
Interest Account. However, interest earned at any point in time will be greater
than the amount actually received by the Trustee and distributed to the
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<PAGE>
Unitholders. Therefore, there will always remain an item of accrued interest
that is added to the daily value of the Units. If Unitholders sell or redeem all
or a portion of their Units, they will be paid their proportionate share of the
accrued interest to, but not including, the third business day after the date of
a sale or to the date of tender in the case of a redemption.
In order to equalize distributions and keep the undistributed interest income of
the Trust at a low level, all Unitholders of record on the first Record Date
will receive an interest distribution on the first Interest Distribution Date.
Because the period of time between the first Interest Distribution Date and the
regular distribution dates may not be a full period, the first regular
distributions may be partial distributions.
Persons who purchase Units between a Record Date and a Distribution Date will
receive their first distribution on the second Distribution Date following their
purchase of Units. Since interest on Bonds in the Trust is payable at varying
intervals, usually in semi-annual installments, and distributions of income are
made to Unitholders at different intervals from receipt of interest, the
interest accruing to the Trust may not be equal to the amount of money received
and available for distribution from the Interest Account. Therefore, on each
Distribution Date the amount of interest actually deposited in the Interest
Account and available for distribution may be slightly more or less than the
interest distribution made. In order to eliminate fluctuations in interest
distributions resulting from such variances, the Trustee is authorized by the
Trust Agreement to advance such amounts as may be necessary to provide interest
distributions of approximately equal amounts. The Trustee will be reimbursed,
without interest, for any such advances from funds available in the Interest
Account.
The Trustee will distribute on each Distribution Date or shortly thereafter, to
each Unitholder of record on the preceding Record Date, an amount substantially
equal to such holder's pro rata share of the cash balance, if any, in the
Principal Account computed as of the close of business on the preceding Record
Date. However, no distribution will be required if the balance in the Principal
Account is less than $.01 per Unit.
Statements to Unitholders. With each distribution, the Trustee will furnish or
cause to be furnished to each Unitholder a statement of the amount of interest
and the amount of other receipts, if any, which are being distributed, expressed
in each case as a dollar amount per Unit.
The accounts of the Trust are required to be audited annually, at the Trust's
expense, by independent auditors designated by the Sponsor, unless the Sponsor
determines that such an audit would not be in the best interest of the
Unitholders. The accountants' report will be furnished by the Trustee to any
Unitholder upon written request. Within a reasonable period of time after the
end of each calendar year, the Trustee shall furnish to each person who at any
time during the calendar year was a Unitholder of the Trust a statement,
covering the calendar year, setting forth for the Trust:
A.As to the Interest Account:
1. The amount of interest received on the Securities;
2. The amount paid from the Interest Account representing accrued interest
of any Units redeemed;
3. The deductions from the Interest Account for applicable taxes, if any,
fees and expenses (including auditing fees) of the Trustee, the Sponsor, the
Evaluator, and, if any, of bond counsel;
33
<PAGE>
4. Any amounts credited by the Trustee to the Reserve Account;
5. The net amount remaining after such payments and deductions, expressed
both as a total dollar amount and a dollar amount per Unit outstanding on the
last business day of such calendar year; and
B.As to the Principal Account:
1. The dates of the maturity, liquidation or redemption of any of the
Securities and the net proceeds received therefrom excluding any portion
credited to the Interest Account;
2. The amount paid from the Principal Account representing the principal of
any Units redeemed;
3. The deductions from the Principal Account for payment of applicable
taxes, if any, fees and expenses (including auditing fees) of the Trustee,
the Sponsor, the Evaluator, and, if any, of bond counsel;
4. The amount of when-issued interest treated as a return of capital, if
any;
5. Any amounts credited by the Trustee to the Reserve Account described
under;
6. The net amount remaining after distributions of principal and
deductions, expressed both as a dollar amount and as a dollar amount per Unit
outstanding on the last business day of the calendar year; and
C.The following information:
1. A list of the Securities as of the last business day of such calendar
year;
2. The number of Units outstanding on the last business day of such
calendar year;
3. The Redemption Price based on the last evaluation made during such
calendar year;
4. The amount actually distributed during such calendar year from the
Interest and Principal Accounts separately stated, expressed both as total
dollar amounts and as dollar amounts per Unit outstanding on the Record Dates
for each such distribution.
Rights of Unitholders. A Unitholder may at any time tender Units to the Trustee
for redemption. The death or incapacity of any Unitholder will not operate to
terminate the Trust nor entitle legal representatives or heirs to claim an
accounting or to bring any action or proceeding in any court for partition or
winding up of the Trust.
No Unitholder shall have the right to control the operation and management of
the Trust in any manner, except to vote with respect to the amendment of the
Trust Agreement or termination of the Trust.
INVESTMENT SUPERVISION
The Sponsor may not alter the portfolio of the Trust by the purchase, sale or
substitution of Securities, except in the special circumstances noted below and
as indicated earlier under "Trust Information" regarding the substitution of
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<PAGE>
Replacement Securities for any Failed Securities. Thus, with the exception of
the redemption or maturity of Securities in accordance with their terms, the
assets of the Trust will remain unchanged under normal circumstances.
The Sponsor may direct the Trustee to dispose of Securities the value of which
has been affected by certain adverse events including institution of certain
legal proceedings or decline in price or the occurrence of other market factors,
including advance refunding, so that in the opinion of the Sponsor the retention
of such Securities would be detrimental to the interest of the Unitholders. The
proceeds from any such sales, exclusive of any portion which represents accrued
interest, will be credited to the Principal Account for distribution to the
Unitholders.
The Sponsor is required to instruct the Trustee to reject any offer made by an
issuer of Securities to issue new obligations in exchange or substitution for
any of such Securities pursuant to a refunding financing plan, except that the
Sponsor may instruct the Trustee to accept or reject such an offer or to take
any other action with respect thereto as the Sponsor may deem proper if (1) the
issuer is in default with respect to such Securities or (2) in the written
opinion of the Sponsor the issuer will probably default with respect to such
Securities in the reasonably foreseeable future. Any obligation so received in
exchange or substitution will be held by the Trustee subject to the terms and
conditions of the Trust Agreement to the same extent as Securities originally
deposited thereunder. Within five days after deposit of obligations in exchange
or substitution for underlying Securities, the Trustee is required to give
notice thereof to each Unitholder, identifying the Securities eliminated and the
Securities substituted therefor.
The Trustee may sell Securities, designated by the Sponsor, from the Trust for
the purpose of redeeming Units tendered for redemption and the payment of
expenses.
ADMINISTRATION OF THE TRUST
The Trustee. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286, telephone 1-800-701-8178. The Bank of New York
is subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System, and
its deposits are insured by the Federal Deposit Insurance Corporation to the
extent permitted by law.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolio of the Trust. For information relating to the
responsibilities of the Trustee under the Trust Agreement, reference is made to
the material set forth under "Unitholders."
In accordance with the Trust Agreement, the Trustee shall keep records of all
transactions at its office. Such records shall include the name and address of,
and the number of Units held by, every Unitholder of the Trust. Such books and
records shall be open to inspection by any Unitholder at all reasonable times
during usual business hours. The Trustee shall make such annual or other reports
as may from time to time be required under any applicable state or Federal
statute, rule or regulation. The Trustee shall keep a certified copy or
duplicate original of the Trust Agreement on file in its office available for
inspection at all reasonable times during usual business hours by any
Unitholder, together with a current list of the Securities held in the Trust.
Pursuant to the Trust Agreement, the Trustee may employ one or more agents for
the purpose of custody and safeguarding of Securities comprising the Trust.
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<PAGE>
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its duties created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of resignation
to all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may at any time remove the Trustee, with
or without cause, and appoint a successor trustee as provided in the Trust
Agreement. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original Trustee shall vest in the successor. The Trustee
shall be a corporation organized under the laws of the United States, or any
state thereof, which is authorized under such laws to exercise trust powers. The
Trustee shall have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
The Evaluator. Ranson & Associates, Inc., the Sponsor, also serves as Evaluator.
The Evaluator may resign or be removed by the Trustee in which event the Trustee
is to use its best efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon acceptance of appointment by the
successor evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the Evaluator
may apply to a court of competent jurisdiction for the appointment of a
successor. Notice of such resignation or removal and appointment shall be mailed
by the Trustee to each Unitholder.
Amendment and Termination. The Trust Agreement may be amended by the Trustee and
the Sponsor without the consent of any of the Unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or (3)
to make such provisions as shall not adversely affect the interests of the
Unitholders. The Trust Agreement with respect to the Trust may also be amended
in any respect by the Sponsor and the Trustee, or any of the provisions thereof
may be waived, with the consent of the holders of Units representing 66 2/3% of
the Units then outstanding, provided that no such amendment or waiver will
reduce the interest of any Unitholder thereof without the consent of such
Unitholder or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of all Unitholders. In no event shall
any Trust Agreement be amended to increase the number of Units issuable
thereunder or to permit, except in accordance with the provisions of the Trust
Agreement, the acquisition of any Securities in addition to or in substitution
for those initially deposited in the Trust. The Trustee shall promptly notify
Unitholders of the substance of any such amendment.
The Trust Agreement provides that the Trust shall terminate upon the maturity,
redemption or other disposition of the last of the Securities held in the Trust.
If the value of the Trust shall be less than the applicable minimum value stated
under "Essential Information," the Trustee may, in its discretion, and shall,
when so directed by the Sponsor, terminate the Trust. The Trust may be
terminated at any time by the holders of Units representing 66 2/3% of the Units
thereof then outstanding. In the event of termination of the Trust, written
notice thereof will be sent by the Trustee to all Unitholders. Within a
reasonable period after termination, the Trustee will sell any Securities
remaining in the Trust and, after paying all expenses and charges incurred by
36
<PAGE>
the Trust, will distribute to Unitholders thereof (upon surrender for
cancellation of certificates for Units, if issued) their pro rata share of the
balances remaining in the Interest and Principal Accounts.
Limitations on Liability. The Sponsor: The Sponsor is liable for the performance
of its obligations arising from its responsibilities under the Trust Agreement,
but will be under no liability to the Unitholders for taking any action or
refraining from any action in good faith pursuant to the Trust Agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct. The Sponsor shall not be liable or responsible in any way
for depreciation or loss incurred by reason of the sale of any Securities.
The Trustee: The Trust Agreement provides that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of monies, Securities or
certificates except by reason of its own negligence, bad faith or willful
misconduct, nor shall the Trustee be liable or responsible in any way for
depreciation or loss incurred by reason of the sale by the Trustee of any
Securities. In the event that the Sponsor shall fail to act, the Trustee may act
and shall not be liable for any such action taken by it in good faith. The
Trustee shall not be personally liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the interest
thereon. In addition, the Trust Agreement contains other customary provisions
limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation furnished
by the Evaluator and shall have no responsibility for the accuracy thereof. The
Trust Agreement provides that the determinations made by the Evaluator shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the Trustee
or Unitholders for errors in judgment, but shall be liable only for its gross
negligence, lack of good faith or willful misconduct.
EXPENSES OF THE TRUST
The Sponsor will charge the Trust a surveillance fee for services performed for
the Trust in an amount not to exceed that amount set forth in "Essential
Information" but in no event will such compensation, when combined with all
compensation received from other unit investment trusts for which the Sponsor
both acts as sponsor and provides portfolio surveillance, exceed the aggregate
cost to the Sponsor for providing such services. Such fee shall be based on the
total number of Units of the Trust outstanding as of the January Record Date for
any annual period. The Sponsor will receive a portion of the sales commissions
paid in connection with the purchase of Units and will share in profits, if any,
related to the deposit of Securities in the Trust. The Sponsor has borne all the
expenses of creating and establishing the Trust including the cost of the
initial preparation, printing and execution of the Prospectus, Trust Agreement
and certificates, legal and accounting expenses, advertising and selling
expenses, payment of closing fees, the expenses of the Trustee, evaluation fees
relating to the deposit and other out-of-pocket expenses.
The Trustee receives for its services fees set forth under "Essential
Information." The Trustee fee which is calculated monthly is based on the
largest aggregate principal amount of Securities in the Trust at any time during
the period. In no event shall the Trustee be paid less than $2,000 per Trust in
any one year. Funds that are available for future distributions, redemptions and
payment of expenses are held in accounts which are non-interest bearing to
Unitholders and are available for use by the Trustee pursuant to normal trust
procedures; however, the Trustee is also authorized by the Trust Agreement to
make from time to time certain non-interest bearing advances to the Trust. The
Trustee's fee is payable on or before each Distribution Date.
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<PAGE>
For evaluation of Securities, the Evaluator shall receive a fee, payable
monthly, calculated on the basis of that annual rate set forth under "Essential
Information," based upon the largest aggregate principal amount of Securities in
the Trust at any time during the monthly period.
The Trustee's and Evaluator's fees are deducted first from the Interest Account
to the extent funds are available and then from the Principal Account. Such fees
may be increased without approval of Unitholders by amounts not exceeding a
proportionate increase in the Consumer Price Index entitled "All Services Less
Rent of Shelter," published by the United States Department of Labor, or any
equivalent index substituted therefor. In addition, the Trustee's fee may be
periodically adjusted in response to fluctuations in short-term interest rates
(reflecting the cost to the Trustee of advancing funds to the Trust to meet
scheduled distributions).
Fees and expenses of the Trust shall be deducted from the Interest Account
thereof, or, to the extent funds are not available in such Account, from the
Principal Account. The Trustee may withdraw from the Principal Account or the
Interest Account such amounts, if any, as it deems necessary to establish a
reserve for any taxes or other governmental charges or other extraordinary
expenses payable out of the Trust. Amounts so withdrawn shall be credited to a
separate account maintained known as the Reserve Account and shall not be
considered a part of the Trust when determining the value of the Units until
such time as the Trustee shall return all or any part of such amounts to the
appropriate account.
THE SPONSOR
Ranson & Associates, Inc., the Sponsor of the Trust, is an investment banking
firm created in 1995 by a number of former owners and employees of Ranson
Capital Corporation. On November 26, 1996, Ranson & Associates, Inc. purchased
all existing unit investment trusts sponsored by EVEREN Securities, Inc.
Accordingly, Ranson & Associates Inc. is the successor sponsor to unit
investment trusts formerly sponsored by EVEREN Unit Investment Trusts, a
service of EVEREN Securities, Inc. Ranson & Associates, Inc. is also the
sponsor and successor sponsor of Series of The Kansas Tax-Exempt Trust and
Multi-State Series of The Ranson Municipal Trust. Ranson & Associates, Inc.
is the successor to a series of companies, the first of which was originally
organized in Kansas in 1935. During its history, Ranson & Associates, Inc.
and its predecessors have been active in public and corporate finance and
have sold bonds and unit investment trusts and maintained secondary market
activities relating thereto. At present, Ranson & Associates, Inc., which is
a member of the National Association of Securities Dealers, Inc., is the
Sponsor to each of the above-named unit investment trusts and serves as the
financial advisor and as an underwriter for issuers in the Midwest and
Southwest, especially in Kansas, Missouri and Texas. The Sponsor's offices
are located at 250 North Rock Road, Suite 150, Wichita, Kansas 67206-2241.
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreement and liquidate the Trust as
provided therein, or (c) continue to act as Trustee without terminating the
Trust Agreement.
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to the Trust. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
38
<PAGE>
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trust. More comprehensive financial information
can be obtained upon request from the Sponsor.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to Federal
tax law have been passed upon by Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The statement of net assets, including the Trust portfolio, of the Trust at the
Initial Date of Deposit, appearing in this Prospectus and Registration Statement
have been audited by Allen, Gibbs & Houlik, L.C., independent auditors, as set
forth in their report appearing elsewhere herein, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
DESCRIPTION OF RATINGS*
Standard & Poor's-A brief description of the applicable Standard & Poor's rating
symbols and their meanings follow:
A Standard & Poor's corporate or municipal bond rating is a current assessment
of the creditworthiness of an obligor with respect to a specific debt
obligation. This assessment may take into consideration obligors such as
guarantors, insurers, or lessees.
The bond rating is not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
The ratings are based on current information furnished by the issuer and
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended, or withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with
the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement, under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA-Bonds rated AAA have the highest rating assigned by Standard & Poor's to a
debt obligation. Capacity to pay interest and repay principal is extremely
strong.
- --------------------
* As described by the rating company itself.
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<PAGE>
AA-Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A-Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay interest
and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
Bonds rated 'BB,' 'B,' 'CCC,' 'CC,' and 'C' are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal.
'BB' indicates the least degree of speculation and 'C,' the highest degree of
speculation. While such Bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
BB-Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions that could lead
to inadequate capacity to meet timely interest and principal payments.
B-Bonds rated B have greater vulnerability to default but presently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions would likely impair capacity or willingness to
pay interest and repay principal.
CCC-Bonds rated CCC have a current identifiable vulnerability to default, and is
dependent on favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal.
CC-The rating CC is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC rating.
C-The rating C is typically applied to debt subordinated to senior debt which is
assigned an actual or implied CCC debt rating.
D-Bonds are rated D when the issue is in payment default, or the obligor has
filed for bankruptcy. The D rating is used when interest or principal payments
are not made on the date due, even if the applicable grace period has not
expired, unless S&P believes that such payments will be made during such grace
period.
Plus ( +) or Minus ( - ): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
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<PAGE>
Provisional Ratings: The letter "p" indicates the rating is provisional. A
provisional rating assumes the successful completion of the project being
financed by the bonds being rated and indicates that payment of debt service
requirements is largely or entirely dependent upon the successful and timely
completion of the project. This rating, however, while addressing credit quality
subsequent to completion of the project, makes no comment on the likelihood of,
or the risk of default upon failure of, such completion. The investor should
exercise his own judgment with respect to such likelihood and risk.
Moody's Investors Service, Inc.-A brief description of the applicable Moody's
Investors Service, Inc. rating symbols and their meanings follow:
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues. Their safety is so absolute that
with the occasional exception of oversupply in a few specific instances,
characteristically, their market value is affected solely by money market
fluctuations.
Aa-Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuations of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities. Their market
value is virtually immune to all but money market influences, with the
occasional exception of oversupply in a few specific instances.
A-Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future. The market
value of A-rated bonds may be influenced to some degree by economic performance
during a sustained period of depressed business conditions, but, during periods
of normalcy, A-rated bonds frequently move in parallel with Aaa and Aa
obligations, with the occasional exception of oversupply in a few specific
instances.
A1-Bonds which are rated A1 offer the maximum in security within their quality
group, can be bought for possible upgrading in quality, and additionally, afford
the investor an opportunity to gauge more precisely the relative attractiveness
of offerings in the marketplace.
Baa-Bonds which are rated Baa are considered as lower medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well. The market value of Baa-rated
bonds is more sensitive to changes in economic circumstances and, aside from
occasional speculative factors applying to some bonds of this class, Baa market
valuations move in parallel with Aaa, Aa and A obligations during periods of
economic normalcy, except in instances of oversupply.
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<PAGE>
Ba-Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B-Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca-Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C-bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Conditional Ratings: Bonds rated "Con(-)" are ones for which the security
depends upon the completion of some act or the fulfillment of some condition.
These are bonds secured by (a) earnings of projects under construction, (b)
earnings of projects unseasoned in operation experience, (c) rentals which begin
when facilities are completed, or (d) payments to which some other limiting
conditions attaches. Parenthetical rating denotes probable credit stature upon
completion of construction or elimination of basis of condition.
Note: Moody's applies numerical modifiers, 1, 2, and 3 in each generic rating
classification from Aa through B in certain areas of its bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
42
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CONTENTS PAGE
SUMMARY 2
ESSENTIAL INFORMATION 3
THE TRUST FUND 5
PORTFOLIO 8
REPORT OF INDEPENDENT AUDITORS 11
STATEMENT OF NET ASSETS 12
RISK FACTORS 13
FEDERAL TAX STATUS 15
TAX REPORTING AND REALLOCATION 19
TRUST INFORMATION 20
RETIREMENT PLANS 23
DISTRIBUTION REINVESTMENT 23
INTEREST, ESTIMATED LONG-TERM RETURN
AND ESTIMATED CURRENT RETURN 24
PUBLIC OFFERING OF UNITS 24
REDEMPTION 30
UNITHOLDERS 32
INVESTMENT SUPERVISION 34
ADMINISTRATION OF THE TRUST 35
EXPENSES OF THE TRUST 37
THE SPONSOR 38
LEGAL OPINIONS 39
INDEPENDENT AUDITORS 39
DESCRIPTION OF RATINGS 39
-----------------------------------------
This Prospectus does not contain all of the information set forth in the
registration statement and exhibits relating thereto, filed with the Securities
and Exchange Commission Washington, D.C. under the Securities Act of 1933 and
the Investment Company Act of 1940, and to which reference is made.
-----------------------------------------
No person is authorized to give any information or to make any representations
not contained in this Prospectus and any information or representation not
contained herein must not be relied upon as having been authorized by the Trust,
the Trustee, or the Sponsor. The Trust is registered as a unit investment trust
under the Investment Company Act of 1940. Such registration does not imply that
the Trust or the Units have been guaranteed, sponsored, recommended or approved
by the United States or any state or any agency or officer thereof.
-----------------------------------------
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any state to any person to whom it is not lawful to
make such offer in such state.
<PAGE>
- ------------------
RANSON
UNIT
INVESTMENT
TRUSTS
- ------------------
------------------
DEFINED HIGH
YIELD
CORPORATE
INCOME
SEREIES 7
------------------
PROSPECTUS FEBRUARY 18, 1998
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents.
The facing sheet
The Cross-Reference sheets
The Prospectus
The Signatures
The following exhibits.
1.1. Trust Agreement.
1.1.1. Standard Terms and Conditions of Trust. Reference is made to Exhibit
1.1.1 to the Registration Statement Form S-6 for Ranson Unit Investment
Trust, Series 54 (File No. 333-20717) as filed on February 4, 1997.
2.1. Form of Certificate of Ownership (pages three and four of the Standard
Terms and Conditions of Trust included as Exhibit 1.1.1).
3.1. Opinion of counsel to the Sponsor as to legality of the securities being
registered including a consent to the use of its name under "Legal
Opinions" in the Prospectus.
3.2. Opinion of counsel to the Sponsor as to the tax status of the securities
being registered.
4.1. Consent of Independent Certified Public Accountants.
4.2. Consent of Independent Evaluator.
EX-27. Financial Data Schedule
S-1
<PAGE>
SIGNATURES
The Registrant, Ranson Unit Investment Trust, Series 65, hereby identifies
Ranson Unit Investment Trusts, Series 53 and Kemper Defined Funds, Series 9 for
purposes of the representations required by Rule 487 and represents the
following: (1) that the portfolio securities deposited in the series as to the
securities of which this Registration Statement is being filed do not differ
materially in type or quality from those deposited in such previous series; (2)
that, except to the extent necessary to identify the specific portfolio
securities deposited in, and to provide essential financial information for, the
series with respect to the securities of which this Registration Statement is
being filed, this Registration Statement does not contain disclosures that
differ in any material respect from those contained in the registration
statements for such previous series as to which the effective date was
determined by the Commission or the staff; and (3) that it has complied with
Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Ranson Unit Investment Trusts, Series 65 has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Wichita, and State of Kansas, on the 18th day of
February, 1998.
RANSON UNIT INVESTMENT TRUSTS, SERIES 65,
Registrant
By: RANSON & ASSOCIATES, INC.,
Depositor
By: ALEX R. MEITZNER
---------------------------------------
Alex R. Meitzner
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on February 18, 1998 by the following persons,
who constitute a majority of the Board of Directors of Ranson & Associates, Inc.
SIGNATURE TITLE
- --------------------- --------------------
DOUGLAS K. ROGERS Executive Vice )
- --------------------- President and Director )
Douglas K. Rogers
ALEX R. MEITZNER Chairman of the Board )
- --------------------- of Directors )
Alex R. Meitzner
ROBIN K. PINKERTON President, Secretary, )
- --------------------- Treasurer and Director ) ALEX R. MEITZNER
Robin K. Pinkerton -----------------------
Alex R. Meitzner
- ------------------------------------------------------------------------------
An executed copy of each of the related powers of attorney was filed with the
Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 of The Kansas Tax-Exempt Trust, Series 51 (File No. 33-
46376) and Series 52 (File No. 33-47687) and the same are hereby incorporated
herein by this reference.
S-2
EXHIBIT 1.1
RANSON UNIT INVESTMENT TRUSTS, SERIES 65
TRUST AGREEMENT
Dated: February 18, 1998
This Trust Agreement between Ranson & Associates, Inc., as Depositor and
Evaluator, and The Bank of New York, as Trustee, sets forth certain provisions
in full and incorporates other provisions by reference to the document entitled
"Standard Terms and Conditions of Trust for Bond Trusts Sponsored by Ranson &
Associates, Inc, Effective: February 14, 1997" (herein called the "Standard
Terms and Conditions of Trust") and such provisions as are set forth in full and
such provisions as are incorporated by reference constitute a single instrument.
All references herein to Articles and Sections are to Articles and Sections of
the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Evaluator and Trustee agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Bonds, as defined in Section 1.01(4) and listed in Schedule A
hereto, have been deposited in trust under this Trust Agreement.
(b) The fractional undivided interest in and ownership of each Trust
represented by each Unit is the amount set forth under "Essential
Information-Fractional Undivided Interest per Unit" in the Prospectus.
(c) The number of Units in each Trust is that amount set forth under
"Essential Information-Number of Units" in the Prospectus.
<PAGE>
-2-
(d) The amount of the second distribution of funds from the Interest
Account shall be that amount set forth under "Essential
Information-Interest Payments-First Payment per Unit" for each Trust in the
Prospectus.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
RANSON & ASSOCIATES, INC.,
Depositor and Evaluator
By /s/ ROBIN K. PINKERTON
___________________________
President
THE BANK OF NEW YORK,
Trustee
By /s/ JEFFREY BIESELIN
___________________________
Vice President
<PAGE>
SCHEDULE A
BONDS INITIALLY DEPOSITED
RANSON UNIT INVESTMENT TRUSTS, SERIES 65
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus for each Trust.)
EXHIBIT 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
February 18, 1998
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
Re: Ranson Unit Investment Trusts Series 65
---------------------------------------
Gentlemen:
We have served as counsel for Ranson & Associates, Inc., as Sponsor and
Depositor of Ranson Unit Investment Trusts Series 65 (the "Fund"), in connection
with the preparation, execution and delivery of Trust Agreements dated the date
of this opinion between Ranson & Associates, Inc., as Depositor, and The Bank of
New York, as Trustee, pursuant to which the Depositor has delivered to and
deposited the Bonds listed in the Schedules to the Trust Agreement with the
Trustee and pursuant to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing all the Units of fractional
undivided interest in, and ownership of, the Fund, created under said Trust
Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the
execution and issuance of certificates evidencing the Units of the
Fund have been duly authorized; and
2. The certificates evidencing the Units of the Fund, when duly
executed and delivered by the Depositor and the Trustee in accordance
with the aforementioned Trust Agreement, will constitute valid and
binding obligations of the Fund and the Depositor in accordance with
the terms thereof.
<PAGE>
-2-
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-46207) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
February 18, 1998
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Ranson Unit Investment Trusts, Series 65
----------------------------------------
Gentlemen:
We have acted as counsel for Ranson & Associates, Inc., as Sponsor and
Depositor of Ranson Unit Investment Trusts Series 65 (the "Trust"), in
connection with the issuance of Units of fractional undivided interest in the
Trust, under a Trust Agreement dated February 18, 1998 (the "Indenture") between
Ranson & Associates, Inc., as Depositor, and The Bank of New York, as Trustee.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we have
deemed pertinent.
The assets of the Trust will consist of a portfolio of high yield, high
risk corporate debt obligations (the "Bonds") as set forth in the Prospectus.
All Bonds have been issued after July 18, 1984. For purpose of the following
discussions and opinions, it is assumed that the Bonds are debt for Federal
income tax purposes.
Based upon the foregoing and upon an investigation of such matters of law
as we consider to be applicable, we are of the opinion that, under existing
Federal income tax law:
(i) The Trust is not an association taxable as a corporation for
Federal income tax purposes but will be governed by the provisions of
subpart E, subchapter J (relating to trusts) of chapter 1, Internal
Revenue Code of 1986 (the "Code").
(ii) Each Unitholder will be considered as owning a pro rata share
of each asset of the Trust for Federal income tax purposes. Under
subpart E, subchapter J of chapter 1 of the Code, income of the Trust
will be treated as income of each Unitholder. Each Unitholder will be
<PAGE>
-2-
considered to have received his pro rata share of income derived from
each Trust asset when such income is considered to be received by the
Trust. Each Unitholder will also be required to include in taxable
income for Federal income tax purposes, original issue discount with
respect to his interest on any Obligation held by the Trust at the
same time and in the same manner as though the Unitholder were the
direct owner of such interest. Original issue discount will be
treated as zero if it is "de minimis" within the meaning of Section
1273 of the Code. If a Bond is a "high-yield discount obligation"
within the meaning of Section 163(e)(5) of the Code, certain special
rules may apply. A Unitholder may elect to include in taxable income
for Federal income tax purposes, market discount as it accrues with
respect to his interest in any Bond held by the Trust which he is
considered as having acquired with market discount at the same time
and in the same manner as though the Unitholder were the direct owner
of such interest.
(iii) The price a Unitholder pays for his Units,
generally including sales charges, is allocated among his pro rata
portion of each Obligation held by a Trust (in proportion to the fair
market values thereof on the valuation date closest to the date the
Unitholder purchases his Units), in order to determine his tax basis
for his pro rata portion of each Obligation held by the Trust. A
Unitholder will be required to include in gross income for each
taxable year the sum of his daily portions of original issue discount
attributable to the Bonds held by the Trust as such original issue
discount accrues and will in general be subject to Federal income tax
with respect to the total amount of such original issue discount that
accrues for such year even though the income is not distributed to the
Unitholders during such year to the extent it is greater than or equal
to the "de minimis" amount described below. To the extent the amount
of such discount is less than the respective "de minimis" amount, such
discount shall be treated as zero. In general, original issue
discount accrues daily under a constant interest rate method which
takes into account the semi-annual compounding of accrued interest.
(iv) Each Unitholder will have a taxable event when an Obligation is
disposed of (whether by sale, exchange, liquidation, redemption,
payment on maturity or otherwise) or when the Unitholder redeems or
sells his Units. A Unitholder's tax basis in his Units will equal his
tax basis in his pro rata portion of all the assets of the Trust.
Such basis, is determined (before the adjustments described below) by
apportioning the tax basis for the Units among each of the Trust
assets according to value as of the valuation date nearest the date of
acquisition of the Units. Unitholders must reduce their tax basis of
their Units for their share of accrued interest, if any on Bonds
delivered after the date the Unitholders pay for their Units to the
extent such interest accrued on such Bonds before the date the Trust
acquired ownership of the Bonds (and the amount of this reduction may
exceed the amount of accrued interest paid to the sellers) and,
consequently such Unitholder may have an increase in taxable gain or
<PAGE>
-3-
reduction in capital loss upon the disposition of such Units. Gain or
loss upon the sale or redemption of Units is measured by comparing the
proceeds of such sale or redemption with the adjusted basis of the
Units. If the Trustee disposes of Bonds (whether by sale, exchange,
payment on maturity, redemption or otherwise), gain or loss is
recognized to the Unitholder (subject to various nonrecognition
provisions of the Code). The amount of any such gain or loss is
measured by comparing the Unitholder's pro rata portion of the total
proceeds from such disposition with his basis for his fractional
interest in the asset disposed of. The basis of each Unit and of each
Obligation which was issued with original issue discount (or which has
market discount) must be increased by the amount of accrued original
issue discount (and market discount if the Unitholder elects to
include market discount in income as it accrues) and the basis of each
Unit and of each Obligation which was purchased by the Trust at a
premium must be reduced by the annual amortization of bond premium
which the Unitholder has properly elected to amortize under Section
171 of the Code. The tax basis reduction requirements of the Code
relating to amortization of bond premium may, under some
circumstances, result in the Unitholder realizing a taxable gain when
his Units are sold or redeemed for an amount equal to or less than his
original cost.
Each Unitholder's pro rata share of each expense paid by the Trust is
deductible by the Unitholder to the same extent as though the expense had been
paid directly by him. It should be noted that, as a result of The Tax Reform
Act of 1986 (the "Act"), certain miscellaneous itemized deductions, such as
investment expenses, tax return preparation fees and employee business expenses
will be deductible by an individual only to the extent they exceed 2% of such
individual's adjusted gross income (similar limitations also apply to estates
and trusts). Unitholders may be required to treat some or all of the expenses
paid by the Trust as miscellaneous itemized deductions subject to this
limitation.
The Code provides a complex set of rules governing the accrual of original
issue discount. These rules provide that original issue discount generally
accrues on the basis of a constant compound interest rate over the term of the
Bonds. Special rules apply if the purchase price of an Obligation exceeds its
original issue price plus the amount of original issue discount which would have
previously accrued, based upon its issue price (its "adjusted issue price").
Similarly, these special rules would apply to a Unitholder if the tax basis of
his pro rata portion of an Obligation issued with original issue discount
exceeds his pro rata portion of its adjusted issue price.
It is possible that a Bond that has been issued at an original issue
discount may be characterized as a "high-yield discount obligation" within the
meaning of Section 163(e)(5) of the Code. To the extent that such an obligation
is issued at a yield in excess of six percentage points over the applicable
Federal rate, a portion of the original issue discount on such obligation will
be characterized as a distribution on stock (e.g., dividends) for purposes of
<PAGE>
-4-
the dividends received deduction which is available to certain corporations with
respect to certain dividends received by such corporations.
If a Unitholder's tax basis in his pro rata portion of any Bond held by the
Trust is less than his allocable portion of such Bond's stated redemption price
at maturity (or, if issued with original issue discount, the allocable portion
of its revised issue price), such difference will constitute market discount
unless the amount of market discount is "de minimis" as specified in the Code.
To the extent the amount of such discount is less than the respective "de
minimis" amount, such discount shall be treated as zero. Market discount
accrues daily computed on a straight line basis, unless the Unitholder elects to
calculate accrued market discount under a constant yield method.
Accrued market discount is generally includible in taxable income of the
Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on Bonds held by the Trust, on the sale, maturity or
disposition of such Bonds by the Trust and on the sale of a Unitholder's Units
unless a Unitholder elects to include the accrued market discount in taxable
income as such discount accrues. If a Unitholder does not elect to annually
include accrued market discount in taxable income as it accrues, deductions for
any interest expense incurred by the Unitholder to purchase or carry his Units
will be reduced by such accrued market discount. In general, the portion of any
interest which was not currently deductible would ultimately be deductible when
the accrued market discount is included in income.
The tax basis of a Unitholder with respect to his interest in an Obligation
is increased by the amount of original issue discount (and market discount, if
the Unitholder elects to include market discount, if any, on the Bonds held by
the Trust in income as it accrues) thereon properly included in the Unitholder's
gross income as determined for Federal income tax purposes and reduced by the
amount of any amortized premium which the Unitholder has properly elected to
amortize under Section 171 of the Code. A Unitholder's tax basis in his Units
will equal his tax basis in his pro rata portion of all the assets of the Trust.
A Unitholder will recognize taxable gain (or loss) when all or part of the
pro rata interest in an Obligation is disposed of for an amount greater (or
less) than his tax basis therefor in a taxable transaction, subject to various
non-recognition provisions of the Code.
As previously discussed, gain attributable to any Bond deemed to have been
acquired by the Unitholder with market discount will be treated as ordinary
income to the extent the gain does not exceed the amount of accrued market
discount not previously taken into income. The tax basis reduction requirements
of the Code relating to amortization of bond premium may, under certain
circumstances, result in the Unitholder realizing a taxable gain when his Units
are sold or redeemed for an amount equal to or less than his original cost.
<PAGE>
-5-
If a Unitholder disposes of a Unit, he is deemed thereby to have disposed
of his entire pro rata interest in all Trust assets including his pro rata
portion of all of the Bonds represented by the Unit. This may result in a
portion of the gain, if any, on such sale being taxable as ordinary income under
the market discount rules (assuming no election was made by the Unitholder to
include market discount in income as it accrues) as previously discussed.
For taxpayers other than corporations, net capital gain (which is defined
as net long-term capital gain over net short-term capital loss for the taxable
year) is subject to a maximum marginal stated tax rate of either 28% or 20%,
depending upon the holding periods of the capital assets. Capital gain loss is
long-term if the holding period for the asset is more than one year, and is
short-term if the holding period for the asset is one year or less. Generally,
capital gains realized from assets held for more than one year but not more than
18 months are taxes at a maximum marginal stated tax rate of 28% and capital
gains realized from assets (with certain exclusions) held for more than 18
months are taxed at a maximum marginal stated tax rate of 20% (10% in the case
of certain taxpayers in the lowest tax bracket). Further, capital gains
realized from assets held for one year or less are taxes at the same rates as
ordinary income. Legislation is currently pending that provides the appropriate
methodology that should be applied in netting the realized capital gains and
losses. Such legislation is proposed to be effective retroactively for tax
years ending after May 6, 1997.
The Taxpayer Relief Act of 1997 (the "1997 Act") includes provisions that treat
certain transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g., short sales, offsetting notional principal
contracts, futures or forward contracts, or similar transactions) as
constructive sales for purposes of recognition of gain (but not loss) and for
purposes of determining the holding period.
"The Revenue Reconciliation Act of 1993" (the "1993 Tax Act") raised tax
rates on ordinary income above the rates at which capital gains are subject to
tax in certain circumstances. Because some or all capital gains are taxed at a
comparatively lower rate under the 1993 Tax Act, the 1993 Tax Act includes a
provision that recharacterizes capital gains as ordinary income in the case of
certain financial transactions that are "conversion transactions" effective for
transactions entered into after April 30, 1993.
A Unitholder who is a foreign investor (i.e., an investor other than a U.S.
citizen or resident or a U.S. corporation, partnership, estate or trust) will
not be subject to United States Federal income taxes, including withholding
taxes on interest income (including any original issue discount) on, or any gain
from the sale or other disposition of, his pro rata interest in any Obligation
held by the Trust or the sale of his Units provided that all of the following
conditions are met:
(i) the interest income or gain is not effectively connected with the
conduct by the foreign investor of a trade or business within the United
States;
<PAGE>
-6-
(ii) if the interest is United States source income (which is the case for
most securities issued by United States issuers), the Obligation is issued
after July 18, 1984, (which is the case for each Obligation held by the
Trust) the foreign investor does not own, directly or indirectly, 10% or
more of the total combined voting power of all classes of voting stock of
the issuer of the Obligation and the foreign investor is not a controlled
foreign corporation related (within the meaning of Section 864(d)(4) of the
Code) to the issuer of the Obligation;
(iii) with respect to any gain, the foreign investor (if an
individual) is not present in the United States for 183 days or more during
his or her taxable year; and
(iv) the foreign investor provides all certification which may be required
of his status.
It should be noted that the 1993 Tax Act includes a provision which
eliminates the exemption from United States taxation, including withholding
taxes, for certain "contingent interest." This provision applies to interest
received after December 31, 1993. No opinion is expressed herein regarding the
potential applicability of this provision and whether United States taxation or
withholding taxes could be imposed with respect to income derived from the Units
as a result thereof.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including foreign, state or local taxes or
collateral tax consequences with respect to the purchase, ownership and
disposition of Units.
Very truly yours
CHAPMAN AND CUTLER
MJK/md
EXHIBIT 4.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts under the caption
"General Information-Independent Auditors" and to the use of our report dated
February 18, 1998 in Amendment No. 1 to the Registration Statement (Form S-6
File No. 333-46207) and related Prospectus of Ranson Unit Investment Trusts,
Series 58.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
February 18, 1998
EXHIBIT 4.2
MULLER DATA CORPORATION
395 HUDSON STREET
NEW YORK, NEW YORK 10014-3622
(212) 807-3800
February 18, 1998
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
Re: RANSON UNIT INVESTMENT TRUST SERIES 65
Consisting of: Defined High Yield Corporate Income Series 7
Gentlemen:
We have examined the Registration Statement No. 333-46207 for the
referenced Trust and acknowledge that Muller Data Corporation is currently
acting as the evaluator for the Ranson Unit Investment Trust Series 65.
Subsequently, we hereby consent to the reference of Muller Data Corporation as
Trust evaluator.
You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.
Sincerely,
MULLER DATA CORPORATION
By: RON VALINOTI
------------------------------------
Senior Vice President
Acknowledged and Agreed:
RANSON & ASSOCIATES, INC.
By:
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<NAME> RANSON UNIT INVESTMENT TRUSTS SERIES 65
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<FISCAL-YEAR-END> FEB-18-1998
<PERIOD-START> FEB-18-1998
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